The PCAOB Is Required to

question 18

Multiple Choice

The PCAOB is required to

• A)conduct continuing inspections of public accounting firms registered with the SEC
• B)inspect firms with more than 100 public clients on an annual basis
• C)inspect firms with fewer than 100 clients at least every four years
• D)post the inspection reports on the SEC website and are available to the public

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Definitions:

Variable Costs

Expenses that vary directly with the amount of activity or output in a company.

Financial Advantage

The benefit obtained by a business from its financial decisions and strategies.

Fixed Manufacturing Overhead

Costs related to manufacturing that do not change with the level of production, such as salaries of supervisors and rent for factory space.

Contribution Margin

The difference between sales revenue and variable costs of production, indicating how much revenue contributes towards covering fixed costs and generating profit.