Which of the following has the least impact upon the integrity of financial statements issued by publicly owned corporations?
A)Federal securities laws.
B)Professional judgment of the accountants who prepare the financial statements.
C)Audits of the financial statements by the Internal Revenue Service.
D)Competence and integrity of the CPAs who perform audits.

Question

Quizplus · Accepted Answer

Audits of financial statements by the Internal Revenue Service do not have an impact on the integrity of financial statements issued by publicly owned corporations. The IRS is responsible for auditing tax returns, but not financial statements. The other options listed (federal securities laws, professional judgment of accountants, and competence/integrity of CPAs) all play a significant role in maintaining the integrity of financial statements.

Which of the Following Has the Least Impact Upon the Integrity