Question
Rocky Point Brewery (RPB) plans to file an initial public offering (IPO) in December 20X4. The IPO filing will include calendar year-end financial statements for
Rocky Point Brewery (RPB) plans to file an initial public offering (IPO) in December 20X4. The IPO filing will include calendar year-end financial statements for 20X1, 20X2, 20X3. Olsen & Alain, CPAs (O&A) has performed calendar year end audits of RPB since 20X0 and has also helped RPB prepare monthly financial statements in accordance with the AICPA independence rules. O&A terminated the accounting services in December 20X2. Which statement best describes why O&A may continue to perform PRB;s audit when it files its IPO under SEC independence rules?
A.) O&A will be independent under SEC independence rules for the most recent year included in the IPO filing
B.) O&A will pay for an independent firm to reperform the accounting services for all periods in the filing
C.) O&A's fee for auditing the combined company will be less than 5% of its revenues
D.) O&A performed only permissible accounting services during the period covered by the financial statements
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