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Questions and Answers
Which of the following provides reasonable assurance of achieving the basic objective of a CPA firm?
Which of the following provides reasonable assurance of achieving the basic objective of a CPA firm?
- Compliance with generally accepted reporting standards
- A system of quality controls (correct)
- Continuing professional education
- A system of peer review
What is the term used to describe the examination by CPAs of a CPA firm's auditing practices to ascertain compliance with its quality control system?
What is the term used to describe the examination by CPAs of a CPA firm's auditing practices to ascertain compliance with its quality control system?
- Examination
- Peer review (correct)
- Compliance audit
- Quality control audit
Are quality control policies and procedures required to be implemented at...
- Audit Firm Level
- Individual Audit Level
Are quality control policies and procedures required to be implemented at...
- Audit Firm Level
- Individual Audit Level
- Yes; Yes (correct)
- Yes, No
- No, Yes
- No, No
Which of the following factors does not affect the nature, timing, and extent of an audit firm's quality control policies and procedures?
Which of the following factors does not affect the nature, timing, and extent of an audit firm's quality control policies and procedures?
Which of the following is not a basic objective of a CPA firm?
Which of the following is not a basic objective of a CPA firm?
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Study Notes
Quality Control in CPA Firms
- Reasonable assurance of achieving the basic objective of a CPA firm is provided by its quality control system.
Peer Review
- Peer review is the examination by CPAs of a CPA firm's auditing practices to ascertain compliance with its quality control system.
Implementation of Quality Control Policies and Procedures
- Quality control policies and procedures are required to be implemented at the audit firm level, not at the individual audit level.
Factors Affecting Quality Control Policies and Procedures
- The nature, timing, and extent of an audit firm's quality control policies and procedures are affected by various factors, but the firm's size is not one of them.
Basic Objectives of a CPA Firm
- A basic objective of a CPA firm is not to provide consulting services.
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