ACCT 4301 FINAL EXAM
General IT controls include all of the following EXCEPT: a. Data center and network operations b. Data validation controls c. Access security controls d. Application system acquisition controls
Data validation controls
During the initial planning phase of an audit, a CPA most likely would a. Identify specific internal control activities that are likely to prevent fraud. b. Evaluate the reasonableness of the entity's accounting estimates. c. Discuss the timing of the audit procedures with the entity's management. d. Inquire of the entity's attorney if it is probable that any unrecorded claims will be asserted.
Discuss the timing of the audit procedures with the entity's management.
For each of the following audit procedures listed below, indicate the type of test each represents. Test of controls only (A), Substantive test of details only (B), Substantive analytical procedures only (C), and Dual test (D). For a sample of receiving documents, agree to vendor invoices and the accounts payable.
Dual test (d)
Operational auditing is oriented primarily toward a. Efficiency and future improvements to accomplish the goals of management. b. The accuracy of data reflected in management's financial records. c. Verification that an entity's financial statements are fairly presented. d. Past protection provided by existing internal control.
Efficiency and future improvements to accomplish the goals of management.
All account receivables recorded are actual amounts owed by customers. (What assertion?)
Existence
In general when auditing the Cash Account, as an auditor I should be most concerned with which assertion? a. Existence b. Completeness
Existence
Which assertions may be tested for the "account balances" category of management assertions? a. Existence, cutoff, rights and obligations, completeness, valuation/allocation, and accuracy b. Completeness, accuracy, valuation, allocation, classification, and presentation c. Occurrence, authorization, completeness, valuation and allocation d. Occurrence, accuracy, rights and obligations, completeness
Existence, cutoff, rights and obligations, completeness, valuation/allocation, and accuracy
"Perform a physical count of inventory at year-end" provide at least some evidence for which assertion(s)? a. Existence only b. Completeness only c. Existence, valuation & allocation, and completeness d. Valuation & allocation, authorization, and cutoff
Existence, valuation & allocation, and completeness
The auditing standards that are used to guide the conduct of the audit are a. Implicitly referred to in the critical audit matters section of the auditor's standard report. b. Explicitly referred to in the critical audit matters section of the auditor's standard report. c. Implicitly referred to in the basis for opinion section of the auditor's standard report. d. Explicitly referred to in the basis for opinion section of the auditor's standard report. e. Implicitly referred to in the opinion s
Explicitly referred to in the basis for opinion section of the auditor's standard report.
(T/F): A staff auditor decides to take employment at his/her audit client after the completion of the current year's audit. The staff auditor's new position with the audit client will be in the marketing department. In accepting this position, the auditor independence has been violated.
False
(T/F): Audit firms can set audit feeds based on the outcome (positive or negative) of financial statement audit.
False
(T/F): Engagement risk is part of the Audit Risk Model
False
(T/F): In completing Case 3 you were to have reviewed PCAOB AS 2510, Auditing Inventories. The current PCAOB auditing standard provides auditors specific guidance for using drone technology to test inventory.
False
(T/F): Inherent risk includes sampling risk and detection risk.
False
(T/F): The auditor can control and reduce risk of material misstatement (RMM).
False
(T/F): Tolerable misstatement is materiality for the financial statements taken as a whole
False
(T/T): Post-SOX, audit firms may provide legal services to their publicly-traded audit clients.
False
True or False: External auditors are hired and paid by users of the financial statements (e.g. investors and creditors).
False
True or False: In accordance with auditing standards, auditors can provide absolute assurance related to financial statement.
False
True or False: The auditor's independence is NOT impaired when audit fees are determined as follows: The client will pay the audit firm a flat fee for the audit based on the extent of audit work and an additional 10% if the company receives a "positive" audit opinion.
False
True or False: The financial statements (and footnotes) are management's responsibility and the external auditor.
False
True or False: The following is NOT a violation of independence rules: The audit staff of XYZ Corporation assists in the preparation of XYZ's year-end cash flow statement.
False
True or False: Transaction assertions refer to balance sheet accounts.
False
Which of the following is INCORRECT regarding the requirements of auditing standards? a. Preliminary analytical procedures are required b. Final analytical procedures are permitted but not required c. Substantive analytical procedures are permitted but not required d. Final analytical procedures are required
Final analytical procedures are permitted but not required
As lower acceptable levels of both audit risk and materiality are established, the auditor should plan more work on individual accounts to a. Find smaller errors. b. Find larger errors. c. Increase the tolerable misstatements in the accounts d. Decrease the risk of over-reliance
Find smaller errors.
Which of the following is not a qualitative factor that may affect an auditor's establishment of materiality? a. Potential for fraud b. The company is close to violating loan covenants c. Firm policy sets materiality at 4% of pretax income d. A small misstatement would interrupt an earnings trend
Firm policy sets materiality at 4% of pretax income
Which of the following is correct concerning required auditor communications about fraud? a. Fraud that involves senior management should be reported directly by the auditor to the audit committee regardless of the amount involved. b. Fraud with a material effect on the financial statements should be reported directly by the auditor to the Securities and Exchange Commission. c. Any requirement to disclose fraud outside the entity is the responsibility of management and not that of the auditor.
Fraud that involves senior management should be reported directly by the auditor to the audit committee regardless of the amount involved.
Audit data analytics performed in the risk assessment process a. Assist the auditor in the forming an overall opinion on the financial statements as part of the financial review phase b. Are part of the substantive testing needed to fill the assurance bucket c. Help the auditor identify areas that may represent specific risks as part of the planning phase d. Reduce the need to modify the audit plan
Help the auditor identify areas that may represent specific risks as part of the planning phase
When is a duty to disclose fraud to parties other than the entity's senior management and its audit committee most likely to exist? a. When the amount is material. b. When the fraud results from misappropriation of assets rather than fraudulent financial reporting. c. In response to inquiries from a successor auditor. When a line manager rather than a lower-level employee commits the fraudulent act
In response to inquiries from a successor auditor.
The following best exemplifies which risk: 'Evaluating whether there are obsolete inventory requires judgment." a. Audit risk b. Control risk c. Inherent risk d. Detection risk
Inherent risk
Which of the following statements best describes what is meant by an unqualified audit opinion? a. Issuance of an unqualified auditor's report indicates that in the auditor's opinion the client's financial statements are not fairly enough presented in accordance with agreed-upon criteria to qualify for a clean opinion. b. Issuance of an unqualified auditor's report indicates that the auditor is not qualified to express an opinion that the client's financial statements are fairly presented in ac
Issuance of a standard unqualified auditor's report indicates that in the auditor's opinion the client's financial statements are fairly presented in accordance with agreed-upon criteria, with no need for the inclusion of qualifying phrases
Which of the following characteristics most likely would heighten an auditor's concern about the risk of intentional manipulation of financial statements? a. Turnover of senior accounting personnel is low b. Insiders recently purchased additional shares of the entity's stock c. Management places substantial emphasis on meeting earnings projections. d. The rate of change in the entity's industry is slow.
Management places substantial emphasis on meeting earnings projections.
Tolerable misstatement is a. The amount of misstatement that management is willing to tolerate in the financial statements. b. Materiality for the balance sheet as a whole. c. Materiality for the income statement as a whole. d. Materiality used to establish a scope for the audit procedures for the individual account balance or disclosures.
Materiality used to establish a scope for the audit procedures for the individual account balance or disclosures.
When the aggregate misstatements at the end of the audit exceeds planning materiality judgment (PJM), the auditor a. Must get the client to correct all misstatements before issuing a clean (unqualified) audit opinion b. Must immediately perform additional procedures to reduce the aggregate misstatements c. Must issue a negative (qualified) audit opinion for the current year d. May issue a clean (unqualified) audit opinion if the client agrees to correct misstatements to get aggregate misstateme
May issue a clean (unqualified) audit opinion if the client agrees to correct misstatements to get aggregate misstatement to be less than PJM
For the accounts receivable balance, below are the risk information so far: Audit risk = low, inherent risk = very low, and control risk = very low. Select the most appropriate option for how the things should be assessed. The aggregate level of substantive testing is... a. Very low b. Moderate c. High d. Very high
Moderate
For the accounts receivable balance, below are the risk information so far: Audit risk = low, inherent risk = very low, and control risk = very low. Select the most appropriate option for how the things should be assessed. Detection risk should be... a. Very low b. Low c. Moderate d. Very high
Moderate
The permanent file section of the working papers that is kept for each audit client most likely contains a. Review notes pertaining to questions and comments regarding the audit work performed. b. A schedule of time spent on the engagement by each individual auditor. c. Correspondence with the entity's legal counsel concerning pending litigation. d. Narrative descriptions of the entity's accounting system and control procedures.
Narrative descriptions of the entity's accounting system and control procedures.
Which type of confirmation is LEAST reliable? a. Positive blank confirmation b. Positive with blanches filled in confirmation c. Negative blank confirmation d. Negative with balances filled in confirmation
Negative with balances filled in confirmation
Which of the following would be considered a nonattest assurance service engagement? I. Expressing an opinion about the reliability of an entity's financial statements. II. Reporting that a company's sustainability metrics are complete and accurate. a. I only. b. Both I and II. c. II only. d. Neither I nor II.
Neither I nor II.
The auditor must be independent of the auditee unless: a. The lack of independence does not influence his or her professional judgmenT b. Both parties agree that the independence issue is not a problem c. The lack of independence is insignificant d. None of the above—the auditor cannot lack independence
None of the above—the auditor cannot lack independence
When considering the overall persuasiveness of audit evidence the auditor needs to consider the following criteria EXCEPT for a. Objectivity in the evidence b. Sufficiency of the evidence c. Relevance of the evidence d. Reliability of the evidence
Objectivity in the evidence
The auditor watches the client's warehouse employees perform their quarterly inventory count. What type of evidence does this BEST represent? a. Inspection of tangible assets b. Observation c. Inspection of records and documents d. Inquiry e. Confirmations
Observation
Which of the following is NOT a component of the COSO framework? a. Risk Assessment b. Information & Communication c. Operational and division of tasks d. Control environment None of the above
Operational and division of tasks
ACCOUNTS RECEIVABLES are most likely to be __ (overstated or understated). As such, the auditor would be most concerned with the __ (existence or completeness) assertion.
Overstated, existence
The organization responsible for setting auditing standards for U.S. publicly-traded companies is- a. PCAOB b. SEC c. FASB d. ASB
PCAOB (public company accounting oversight board)
In connection with the element of engagement performance, a CPA firm's system of quality control should ordinarily include procedures covering all of the following except a. Performance evaluation. b. Consistent, high-quality engagement performance. c. Supervision responsibilities. d. Review responsibilities.
Performance evaluation
The auditor sends out confirmations to a sample of the Company's customers. For the confirmation to be considered audit evidence, the auditor wants the customer to fill in the amount owed to the Company as of 12/31/2019 and to send the confirmation directly back to the auditor. What type of confirmation does this describe? a. Positive blank confirmation b. Positive confirmation with balances indicated c. Negative confirmations d. None of the above.
Positive blank confirmation
In accordance with the PCAOB's "General Principles and Responsibilities" auditing standards, all of the following are responsibilities of the auditor, except for a. Express an opinion regarding whether the financial statements are presented in conformity with GAAP b. Provide absolute assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud c. Maintain independence mind and appearance d. Exercise professional skepticism
Provide absolute assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud
All of the following are changes to the audit profession as a result of SOX EXCEPT for... a. End of "self-regulation" for audits of publicly-traded companies b. Public company audits are subject to regulatory inspections c. Public companies are required to obtain an external audit d. Many non-audit services for financial audit clients are banned
Public companies are required to obtain an external audit
The authoritative body designed to promulgate standards concerning a CPA's association with audited financial statements of an entity that is required to file financial statements with the SEC is the: a. Financial accounting standards board b. General accounting office c. Public company accounting oversight board d. Auditing standards board
Public company accounting oversight board (PCAOB)
The Sarbanes-Oxley Act of 2002 pertains to a. Public company audits only b. private company audits only c. Both public and private company audits d. None of the above
Public company audits only
A client has used an inappropriate method of accounting for its pension liability on the balance sheet. The resulting misstatement is material, but the auditor does not consider its effect to be pervasive. The auditor is unable to convince the client to alter its accounting treatment. The rest of the financial statements are fairly stated in the auditor's opinion. Which kind of audit report should the auditor issue under these circumstances? a. Standard unqualified opinion. b. Qualified opinion
Qualified opinion due to departure from GAAP
To test COMPLETENESS of accounts payable, the auditor would select his/her sample from... a. Accounts payable subsidiary ledger b. Receiving document c. Shipping document (BOL) d. Vendor invoices
Receiving document
An auditor would be least likely to use confirmations in connection with the examination of a. Inventory held in a third-party warehouse. b. Refundable income taxes. c. Long-term debt. d. Stockholders' equity
Refundable income taxes.
During the audit of Moon Co., the auditor disagrees with management's estimation of collectible accounts receivable. The possible misstatement amount is material. Which of the statements below should weigh most heavily for the auditor in this instance? a. Moon management has the right to make company estimates. b. Requiring an adjustment to the allowance for doubtful accounts would give stock-holders access to fair and adequate information. c. There is a small but reasonable chance that account
Requiring an adjustment to the allowance for doubtful accounts would give stock-holders access to fair and adequate information.
The company has full control over its PP&E. (What assertion?)
Rights and obligation
Which assertion BEST pertains to the following issue: "The company factored (I.e., sold) its accounts receivable to a third party, and thus has restricted control of these receivables." a. Existence b. Rights and Obligations c. Completeness d. Cutoff
Rights and obligations
To test the COMPLETENESS of sales, the auditor would select his/her sample from.. a. Sales Journal b. Sales invoices c. Accounts receivable subsidiary ledger d. Shipping documents (BOL)
Shipping documents (BOL)
All of the following nonaudit services are identified by the SEC as generally impairing an auditor's independence with respect to an audited entity except a. Information systems design and implementation. b. Human resource services. c. Management functions. d. Some specific tax services. d. All of the above are seen by the SEC as impairing independence
Some specific tax services.
For each of the following audit procedures listed below, indicate the type of test each represents. Test of controls only (A), Substantive test of details only (B), Substantive analytical procedures only (C), and Dual test (D). Confirm accounts receivable balance with bank as of the balance sheet date
Substantive test of details only (b)
For each of the following audit procedures listed below, indicate the type of test each represents. Test of controls only (A), Substantive test of details only (B), Substantive analytical procedures only (C), and Dual test (D). Observe and evaluate whether shipping personnel have access to the order entry or billing activities
Test of controls only (a)
For each of the following audit procedures listed below, indicate the type of test each represents. Test of controls only (A), Substantive test of details only (B), Substantive analytical procedures only (C), and Dual test (D). Examine a sample of monthly bank reconciliations for independent review by a supervisor.
Test of controls only (a)
In which of the following circumstances would a CPA who audits XM Corporation lack independence? a. The CPA and XM's president are both on the board of directors of COD Corporation b. The CPA reduced XM's usual audit fee by 40 percent because XM's financial condition was unfavorable c. The CPA's nondependent daughter works as an engineer at XM Corporation d. The CPA's wife is an internal auditor at XM Corporation
The CPA's wife is an internal auditor at XM Corporation
Assume you are the auditor and you completed the following analytical procedure for your client: "comparison of gross profit (gross profit/net sales) percentage by product line with period years" (recall that gross profit = sales - COGS). You note that your client's gross profit percentage for the current year increased significantly from prior year. Given the above analysis, select the BEST possible explanation to explain increase in gross profit by %. a. The client reduced the selling price o
The client's costs to produce its goods decreased from prior year and its selling price of its goods increased
An auditor's analytical procedures performed during the overall review stage indicated that the entity's accounts receivable balance had doubled since the end of the prior year. However, the allowance for doubtful accounts as a percentage of accounts receivable remained the same. Which of the following explanations most likely would satisfy the auditor? a. The entity liberalized its credit standards in the current year and sold much more merchandise to customers with poor credit ratings b. Twic
The entity opened a second retail outlet in the current year and its credit sales approximately equaled the older, established outlet
The substantive analytical procedure known as trend analysis is best described by a. The comparison, across time or to a benchmark, of relationships between financial statement accounts or between an account and nonfinancial data. b. Development of a model to form an expectation using financial data, nonfinancial data, or both to test account balances or changes in account balances between accounting periods. c. The examination of changes in an account over time. d. The comparison of common-siz
The examination of changes in an account over time.
When the auditor decides to use a substantive strategy, he/she will plan to set control risk at a. The lowest level possible b. The highest level possible c. A moderate level d. None of the above
The highest level possible
The occurrence assertion refers to... a. No transactions were left off the company's books/accounting records b. Transactions are recorded at the correct amounts c. Transactions recorded in the company's books/accounting records are valid i.e., not fictitious d. Transactions are recorded in the correct accounting period
Transactions recorded in the company's books/accounting records are valid i.e., not fictitious
(T/F): Immediate family members include spouse, spousal equivalent, and/or dependents, and such members should follow independence rules of the covered member with a few expectations.
True
(T/F): When an auditor serves in the role of management for an audit client, he/she has violated independence rules.
True
True or False: An intern on a financial statement audit engagement team is deemed to be a "covered member."
True
True or False: Auditors need to maintain BOTH independence in mind and appearance.
True
True or False: In the current audit environment, there are three main sets of auditing standards.
True
Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's a. Awareness of the consistency in the application of generally accepted accounting principles between periods. b. Evaluation of all matters of continuing accounting significance. c. Opinion of any subsequent events occurring since the predecessor's audit report was issued. d. Understanding as to the reasons for the change of auditors
Understanding as to the reasons for the change of auditors
DEPRECIATION EXPENSES are most likely to be __ (overstated or understated). As such, the auditor would be most concerned with the __ (occurrence or completeness) assertion.
Understated, completeness
UNEARNED REVENUES are most likely to be __ (overstated or understated). As such, the auditor would be most concerned with the __ (existence or completeness) assertion.
Understated, completeness
For the accounts receivable balance, below are the risk information so far: Audit risk = low, inherent risk = very low, and control risk = very low. Select the most appropriate option for how the things should be assessed. RMM would be assessed at: a. Very low b. Moderate Moderate-high
Very low
Indicated whether the following is or is not a violation of the PCAOB "GAAS" standards: The company/client told the auditor that its accounting department is short staffed and therefore, need the auditors assistance to prepare the cash flow statement. In order to ensure the audit is completed on time, the auditor assisted the client in preparing the cash flow statement
Violation of PCAOB "GAAS"
Which of the following audit procedures/tests is an substantive analytical procedure? a. Confirm accounts payable balances on year-end b. Recalculate accrued interest c. Compare the inventory turnover to prior year and to industry averages d. Recalculate depreciation expense for a sample of capital assets e. None of the above
Compare the inventory turnover to prior year and to industry averages
All customers' accounts receivable for the company are recorded and included in the accounts receivable balance. What assertion does this BEST describe? a. Valuation and allocation b. Cutoff c. Right and Obligation d. Completness e. Existence
Completeness
There are no unrecorded sales. (What assertion?)
Completeness
The following best exemplifies which risk: "Evaluation indicates that supervisors review monthly bank reconciliations to ensure timely preparation." a. Audit risk b. Control risk c. Inherent risk d. Detection risk
Control risk
Of the following, which is the LEAST persuasive type of audit evidence? a. Documents mailed by outsiders or 3rd parties to the auditor b. Copies of company sales invoices inspected by the auditor c. Computations made by the auditor d. Driving by to see the building owned by the company
Copies of sales invoices inspected by the auditor
Which measures is an evaluation of a company's ability to pay current liabilities? a. Current ratio (current assets/current liabilities) b. Debt to total assets ratio (total liabilities/total assets) c. Both (a) and (b) d. None of the above
Current ratio (current assets/current liabilities)
A company's revenue and associated accounts receivable (on account sales) earned as of 12/30/2019, the company's year-end, was not recorded until 1/3/2020. What assertion does this BEST describe? a. Cutoff b. Accuracy c. Occurrence d. Authorization e. Valuation and allocation
Cutoff
In which of the following situations would a CPA's independence be considered impaired according to the Code of Professional Conduct? 1. The CPA has a car loan from a bank that is an audit entity. The loan was made under the same terms available to all customers. 2. The CPA has a direct financial interest in an audit entity, but the investment is maintained in a blind trust. 3. The CPA owns a commercial building and leases it to an audit entity. The rental income is material to the CPA. a. 1
2 and 3.
An audited company has not paid its 2018 audit fees. According to the AICPA Code of Professional Conduct, for the auditor to be considered independent with respect to the 2019 audit, the 2018 audit fees must be paid before the a. 2018 report is issued b. 2019 fieldwork is started c. 2019 report is issued d. 2020 fieldwork is started
2019 report is issued
In which of the following situations would a CPA be in violation of the AICPA code of professional conduct in determining a fee? a. A fee based on whether the CPA's report on the client's financial statements results in the approval of a bank loan b. A fee based on the number of hours needed to complete the engagement by auditors various levels of experience c. A fee based on the nature of service rendered and the CPA's particular expertise of the actual time spent on the engagement d. A fee ba
A fee based on whether the CPA's report on the client's financial statements results in the approval of a bank loan
One of a CPA firm's basic objectives is to provide professional services that conform with professional standards. Reasonable assurance of achieving this basic objective is provided through a. A system of quality control b. A system of peer review. c. Continuing professional education d. Compliance with generally accepted reporting standards
A system of quality control
The organization responsible for setting auditing standards for U.S. privately held companies is- a. PCAOB b. SEC c. FASB d. ASB
ASB (auditing standards board)
When selecting a sample to confirm balances (e.g., cash, accounts receivable, and accounts payable), the auditor would select his/her sample from... a. supporting documents b. Auditor's own list of related third-parties c. Accounting records d. List based on inquiry of client personnel or management
Accounting records
Analytical procedures performed in the overall review stage of an audit suggest that several accounts have unexpected relationships. The results of these procedures most likely would indicate that a. Fraud exists within the relevant accounts b. Internal control activities are not operating effectively c. Addition test of details are required d. None of the above
Addition test of details are required
Which of the following presumptions is least likely to relate to the reliability of audit evidence? a. The more effective internal control, the more assurance it provides about the accounting data and financial statements. b. An auditor's opinion is formed within a reasonable time to achieve a balance between benefit and cost. c. Evidence obtained from independent sources outside the entity is more reliable than evidence secured solely within the entity d. The independent auditor's direct perso
An auditor's opinion is formed within a reasonable time to achieve a balance between benefit and cost.
Which of these statements concerning illegal acts by clients is correct? a. An auditor's responsibility to detect illegal acts that have a direct and material effect on the financial statements is the same as that for errors and fraud. b. An audit in accordance with auditing standards normally includes audit procedures specifically designed to detect illegal acts that have an indirect but material effect on the financial statements. c. An auditor considers illegal acts from the perspective of t
An auditor's responsibility to detect illegal acts that have a direct and material effect on the financial statements is the same as that for errors and fraud.
Analytical procedures used in planning an audit focus on identifying: a. Weakness in internal control b. The various assertions that are embodied in the financial statements c. Areas that may represent risks relevant to the audit d. The predictability of financial data from individual transactions
Areas that may represent risks relevant to the audit
Of the following, which is the least reliable type of audit evidence? a. Documents mailed by outsiders or 3rd party to the auditor b. Correspondence between the auditor and third party vendors c. Asking the controller about an end of period adjustment d. Computations made by the auditor
Asking the controller about an end of period adjustment
Reports on service organizations typically: a. Provide reasonable assurance that their financial statements are free from material misstatements b. Ensure that the entity will not have any misstatements in areas related to the service organization's activities c. Assess whether the service organization's controls are suitably designed to achieve internal control objectives d. Ensure that the auditee is billed correctly e. None of the above
Assess whether the service organization's controls are suitably designed to achieve internal control objectives
Which statement regarding existing auditing standards is true. a. Auditors must perform some substantive analytical procedures for all significant accounts and assertions b. Auditors must perform some substantive test of details for all significant accounts and assertions c. Auditors are required to perform some substantive analytical procedures and/or substantive test of details for all significant accounts and assertions d. Auditors are not required to perform any substantive procedures for s
Auditors are required to perform some substantive analytical procedures and/or substantive test of details for all significant accounts and assertions
Which of the following is NOT true regarding post-SOX nonaudit services? a. A CPA firm may not provide actuarial services to a financial statement audit client/company b. A CPA firm no longer can provide banned non-audit services noted in Section 201 of SOX to any company c. Tax services are allowed to be provided to audit clients/companies d. Audit committees must pre-approve non-audit services
A CPA firm no longer can provide banned non-audit services noted in Section 201 of SOX to any company
Which of the following is NOT a change of the SOX act? a. End of "self-regulation" for publicly-traded companies b. A certain number of hours, which is based on the size of the company being audited, must be spent on each audit engagement c. Audit committees play a larger role in "hiring" auditors d. Audit firms are required to rotate partners of audit engagements every 5 years for public company audits
A certain number of hours, which is based on the size of the company being audited, must be spent on each audit engagement
