An accounting firm in the U.S.may engage in audit and nonaudit services only if
A)management preapproves the activity
B)the audit committee preapproves the activity
C)management requested the activity
D)the audit committee approved the final activity

Question

Quizplus · Accepted Answer

According to the Public Company Accounting Oversight Board (PCAOB), a U.S. accounting firm may provide both audit and nonaudit services to a company only if the activity is preapproved by the company's audit committee. This requirement is designed to maintain auditor independence and reduce the risk of conflicts of interest. While management may request or approve the activity, the ultimate approval and responsibility for the engagement lies with the audit committee. Therefore, option B is the best choice.

An Accounting Firm in the U