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The Partnership of Booth & Haynes, CPAs, Has Been Engaged

Question 87

Multiple Choice

The partnership of Booth & Haynes, CPAs, has been engaged to examine the financial statements of Paul, Inc., in connection with the registration of Paul's securities with the Securities and Exchange Commission.Under these circumstances, which of the following statements is true?


A) Booth & Haynes is assuming much greater third-party liability than it assumes on engagements under common law.
B) If its examination is not fraudulent, Booth & Haynes may issue an appropriate disclaimer to the financial statements and thereby avoid liability.
C) Booth & Haynes must incorporate if they wish to practice before the SEC.
D) Booth & Haynes must be a large interstate firm if they wish to practice before the SEC.

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