Which is true about the factors that you might consider in selecting a basis (benchmark) for preliminary financial statement materiality?

• A. Accounts with high volatility make a good basis for materiality
• B. You should always use the same basis that was used in the previous year
• C. You should only select one basis for materiality
• D. Accounts that are more relevant in an industry make a good basis for materiality

Which of the following factors would most likely lead a CPA to conclude that a potential audit engagement should not be accepted?

• A.

  The engagement requires an expert in financial derivatives and the CPA firm is unlikely to aquire such expertise in a timely fashion.

• B.

  There is a substantial risk of unintentional misapplication of accounting principles.

• C.

  Management refuses to adopt a computerized accounting system, opting instead for a paper based one.

• D.

  Management is dominated by one person who is also the majority stockholder.

Which party has the primary responsibility for maintaining internal controls for a private company?

• A. Management of the company.
• B. The AICPA
• C. Securities and Exchange Commission.
• D. The engagement partner