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.
2. Which of the following is not true about an audit report?
a. An explanatory paragraph may be included to draw the reader’s attention to some aspect of the financial statements.
b. If a material misstatement exists in the financial statements, the auditor should not issue an unqualified opinion.
c. The report is addressed to the company’s board of directors and shareholders.
d. If anything other than unqualified opinion is issued, the financial statements must contain a
material misstatement.