A basic objective of a CPA firm is to provide professional services that conform to professional, legal, and regulatory requirements. Reasonable assurance of achieving this basic objective is provided through:
A)compliance with generally accepted reporting standards.
B)a system of quality control.
C)a system of peer review.
D)continuing professional education.

Question

Quizplus · Accepted Answer

A system of quality control is a set of policies and procedures implemented by a CPA firm that provides reasonable assurance that the firm's personnel comply with professional standards and regulatory requirements. This system includes policies and procedures related to the hiring, training, evaluation, and retention of personnel, as well as the monitoring of the quality of services provided by the firm.

Option A is incorrect because compliance with generally accepted reporting standards only ensures compliance with reporting requirements, not overall professional standards. Option C is incorrect because peer review is a process of evaluating a CPA firm's quality control system, but it does not provide reasonable assurance that the firm is complying with professional standards and regulatory requirements. Option D is incorrect because continuing professional education is an ongoing requirement for CPAs, but it does not provide reasonable assurance that the firm is complying with professional standards and regulatory requirements.

A Basic Objective of a CPA Firm Is to Provide