Firm A performs audits of 60 issuers, while firm B performs audits of 120 issuers. How often must each firm undergo a PCAOB inspection?
A)Both firm A and firm B will be inspected every other year.
B)Firm A will be inspected annually and firm B will be inspected every three years.
C)Firm A will be inspected every three years and firm B will be inspected annually.
D)Both firm A and firm B will be inspected annually.

Question

Quizplus · Accepted Answer

PCAOB inspections are based on the number of public company clients a firm audits. According to PCAOB rules, firms with 100 or fewer public company clients must be inspected at least once every three years, while firms with more than 100 public company clients must be inspected annually. Therefore, firm A will be inspected every three years because it audits 60 issuers, and firm B will be inspected annually because it audits 120 issuers.

Firm a Performs Audits of 60 Issuers, While Firm B