Which of the Following Factors Would Most Likely Cause a CPA

question 76

Multiple Choice

Which of the following factors would most likely cause a CPA to decide not to accept a new audit engagement?

• A)Lack of understanding of the potential client's internal auditors' computer-assisted audit techniques.
• B)Management's disregard for internal control.
• C)The existence of related party transactions.
• D)Management's attempt to meet earnings per share growth rate goals.

Identify the role of source documents in the accounting process.

Understand how transactions impact business equity and financial positioning.

Understand the concepts of debit and credit in accounting.

Distinguish between asset, liability, and equity accounts.

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Definitions:

Corporate Debt

Financial obligations owed by a corporation, typically arising from bonds or loans used to finance the company's operations.

LLC

A Limited Liability Company is a business structure in the United States that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Management Rights

The legal and contractual powers that empower an employer to control and direct their workforce and operations.

Capital Contributions

Investments made by owners or shareholders into a company or partnership, increasing the company's equity.