Which of the Following Statements Is True When the CPA

question 56

Multiple Choice

Which of the following statements is true when the CPA has been engaged to perform an audit of financial statements?

• A) The CPA firm is engaged and paid by the client; therefore, the firm has primary responsibility to be an advocate for the client.
• B) The CPA firm is engaged and paid by the client, but the primary beneficiaries of the audit are those who rely on the financial statements.
• C) Should a situation arise where there is no convincing authoritative standard available, and there is a choice of actions which could impact a client's financial statements, the CPA is free to endorse the choice which is in the investors' interests.
• D) The CPA firm has primary responsibility to the FASB.

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Definitions:

Total Institution

A place of residence and work where a large number of like-situated individuals, cut off from the wider community for a considerable time, together lead an enclosed, formally administered round of life.

Supervised

Being under the direction or oversight of someone else, often in a work or learning environment, to ensure tasks are completed correctly or to facilitate learning.

Seniors

Older adults, typically those age 65 and above, who are often considered to have distinct social, health, and economic needs.

Projected

Something that is estimated or forecasted for the future based on current data or trends.