The Four Categories for Describing the Size of Audit Firms

question 22

Multiple Choice

The four categories for describing the size of audit firms include: the Big Four international firms; national firms; regional and local firms; and small firms. Which of the following is not a characteristic of a small firm?

• A) Most have fewer than 25 professionals.
• B) They perform audits on small and not-for-profit businesses.
• C) Tax services are more important to their practice than auditing.
• D) They do not audit publically traded companies.

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Definitions:

Guaranteed

Promised with certainty or underwritten with a promise of payment or performance.

Defaulted

Refers to the failure to meet a legal obligation or agreement, especially failing to make required payments on a loan.

Personal Property Security Act

Legislation that governs the creation and registration of security interests in personal property, aside from real estate, to secure payment or performance of an obligation.

Legislation

Laws enacted by Parliament or legislatures; also known as statutes.