Which of the following statements is true of CPA firms?
A) They can only audit companies that are solely in the private sector.
B) They have strong associations with the companies they are auditing.
C) They are not authorized to audit publicly traded companies.
D) They must be independent of the companies they are auditing.

Question

Which of the following statements is true of CPA firms?
A) ​They can only audit companies that are solely in the private sector.
B) ​They have strong associations with the companies they are auditing.
C) ​They are not authorized to audit publicly traded companies.
D) ​They must be independent of the companies they are auditing.

Quizplus · Accepted Answer

CPA firms must be independent of the companies they are auditing in order to maintain objectivity and ensure the accuracy of financial statements. This is a requirement under professional standards and regulations, and failure to maintain independence can result in significant legal and reputational consequences for the CPA firm.

Which of the Following Statements Is True of CPA Firms