A CPA Firm Billed for Audit Services Performed for a Client

question 12

Multiple Choice

A CPA firm billed for audit services performed for a client more than one year ago.The client has paid a portion of the fees outstanding,but it has not been able to pay the remaining balance due to cash flow problems.The CPA firm has verified that the cash flow problems are authentic and expects the client to be able to pay the remainder of the bill,but the CPA firm cannot reasonably estimate the timing of such payments.As a result,the CPA firm:

• A) Remains independent if the amounts that remain owing are immaterial to the CPA firm
• B) Remains independent if the client has paid over 50% of the total invoice outstanding
• C) Can preserve its independence if the client willingly signs a Note Payable for these services and the note bears a reasonable market rate of interest
• D) Lacks the independence to perform further attestation services

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Definitions:

Benjamin Franklin

An American polymath who was a leading figure in the American Enlightenment, known for his contributions to the drafting of the Declaration of Independence and his experiments with electricity.

Junto

Originally, a club or assembly of individuals gathered for political or other purposes, often aimed at mutual improvement or societal influence.

Values

Core beliefs or standards that guide and motivate attitudes and actions.

Moral Behavior

Actions that align with societal, cultural, or personal norms of right and wrong, often involving considerations of fairness, justice, and ethics.