When Independent CPAs in Public Practice Take Engagements to Audit

question 21

Multiple Choice

When independent CPAs in public practice take engagements to audit governmental units or entities that receive financial assistance from governmental units,they must follow ________.

• A)GAAS only
• B)GAAS and Public sector auditing standards
• C)Public sector auditing standards only
• D)internal auditing standards

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Definitions:

Recession

A temporary downturn in the economy characterized by a decrease in commerce and production, typically marked by a reduction in the Gross Domestic Product (GDP) for two consecutive quarters.

Depression

A severe recession.

Short Run

A period in economic analysis during which at least one factor of production is considered fixed, limiting the ability of the economy or firm to adjust to changes in market conditions.

Aggregate Supply

The total supply of goods and services that firms in a national economy plan on selling during a specific time period.