Question

1. Whittington and Company is a CPA firm that audits publicly traded companies. Which of the following is true concerning Whittington and Company?

a. Whittington and Company are regulated by FASB.

b. Whittington and Company are hired by the companies they audit.

c. Whittington and Company should follow the auditing standards set forth by the Auditing Standards Board.

d. Whittington and Company prepares the financial statements for the companies they audit.

Answer 1

b. Whittington and Company are hired by the companies they audit..

Auditors are generally hired by the companies they audit.

Auditing standards set by PCAOB shall be followed while auditing public companies.

Auditors audit the financial statements but do not prepare the financial statements.

They are not regulated by FASB