A CPA Has Been Hired to Audit a Bank That

question 9

Multiple Choice

A CPA has been hired to audit a bank that is regulated by the federal banking authorities.This audit will be submitted by the bank to numerous readers,including federal regulators.The CPA's audit agreement with the bank provides that the bank will "reimburse and indemnify it for all losses it incurs if the bank's financial statements were prepared by the bank in a manner that was misleading or fraudulent." This provision:

• A) Definitely is a violation of the Acts Discreditable Rule
• B) Definitely is not a violation of the Acts Discreditable Rule because it provides for a limitation on the CPA's liability only in cases where the client solely is at fault
• C) Definitely is not a violation of the Acts Discreditable Rule because the CPA firm's agreement is reasonable and appropriate
• D) Potentially is a violation of the Acts Discreditable Rule

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Definitions:

Schizophrenia

An intense psychiatric condition identified by alterations in thought processes, sensory experiences, emotional states, communication, self-awareness, and conduct.

Season

A division of the year marked by changes in weather, ecology, and hours of daylight, typically resulting from the earth's orbit around the sun leading to climatic changes.

Genetic Influences

The impact of genes inherited from parents on various traits and characteristics, including physical attributes, behaviors, and susceptibility to diseases.

Schizophrenia

A mental disorder characterized by distortions in thinking, perception, emotions, language, sense of self, and behavior, often manifesting through hallucinations and delusions.