a small cpa firm provides audit services to a large local company. almost 80% of
ID: 2386531 • Letter: A
Question
a small cpa firm provides audit services to a large local company. almost 80% of the cpa firms revenues comes from this client. which statement is most likely to be true ?1. appearance of independence may be lacking
2. the small cpa firm does not have proficinecy to perform a larger audit
3. the situation is satisfactory if the auditor exercises due skeptical negative assurance care in the audit
4. the auditor should provide am "emphasis of a matter paragraph" to his/her audit report adequately disclosing this information and then it may issue an unqualified opinion
Explanation / Answer
1. appearance of independence may be lacking
2. the small cpa firm does not have proficinecy to perform a larger audit
3. the situation is satisfactory if the auditor exercises due skeptical negative assurance care in the audit
4. the auditor should provide am "emphasis of a matter paragraph" to his/her audit report adequately disclosing this information and then it may issue an unqualified opinion
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