Solutions of Chapter 2

Chapter 2 - The CPA Profession

← Multiple Choice Questions From CPA Examinations

2-16 a. (1) b. (2) c. (3) d. (3)

2-17 a. (2) b. (2) c. (3)

2-19 a. Engagement performance

b. Personnel management

c. Engagement performance

d. Engagement performance

e. Independence, integrity, and objectivity

f. Monitoring

g. Acceptance and continuation of clients and engagements

h. Personnel management

i. Personnel management

2-21

| |HOLMES' ACTIONS RESULTING IN FAILURE TO COMPLY WITH GAAS |

|BRIEF DESCRIPTION OF GAAS | |

|GENERAL STANDARDS | |

|The audit is to be performed by a person or persons having |It was inappropriate for Holmes to hire the two students to conduct the |

|adequate technical training and proficiency as an auditor. |audit. The audit must be conducted by persons with proper education and |

| |experience in the field of auditing. Although a junior assistant has not |

| |completed his formal education, he may help in the conduct of the audit as |

| |long as there is proper supervision and review. |

|In all matters relating to the assignment, an independence |To satisfy the second general standard, Holmes must be without bias with |

|in mental attitude is to be maintained by the auditor or |respect to the client under audit. Holmes has an obligation for fairness to |

|auditors. |the owners, management, and creditors who...