Item 16

Item 16

Which of the following is true?

Multiple Choice

• Federal securities laws regarding the issuance of misleading financial statements apply not only to the independent auditors, but to management of the company as well.

• Attaining a passing score on the part of the Uniform CPA Examination that covers professional ethics is evidence of integrity and commitment to ethical conduct.

• The existence of generally accepted accounting principles (GAAP) virtually eliminates the need for professional judgment except in very unusual circumstances.

• A professional accountant should resign his position rather than become involved in the distribution of financial statements indicating insolvency.