Which of the Following Statements Represents an Audit Failure

question 48

Multiple Choice

Which of the following statements represents an audit failure?

• A) A client goes bankrupt or has serious financial difficulty.
• B) An auditor failed to conduct an audit in accordance with GAAS.
• C) An auditor cannot collect the audit fees from the client.
• D) An auditor is sued by a third party.

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Definitions:

Home Mortgage

A loan provided by a financial institution to a borrower for the purchase of a residential property, secured by the property itself.

Tax-Exempt Securities

Investments whose interest income is not subject to federal income tax, and in some cases, state and local taxes.

Residence Acquisition Debt

Mortgage debt incurred in acquiring, constructing, or substantially improving a principal residence, which is secured by the residence.

Fully Deductible

Expenses that can be subtracted in full from taxable income, reducing the total amount on which tax is calculated.