Question

Choose the correct statement about audits of corporations:

a. Public corporations (those whose stock are traded on exchanges) are subject to annual audit as to their compliance with GAAP.
b. It is the employees of the firm being audited who perform the annual audit of the financial statements of that firm.
c. Outside auditors are paid by the government for auditing the financial statements of corporations.
d. Revenue Canada performs audits of corporations' financial statements

Answer 1

Answer:A. Public corporations (those whose stock are traded on exchanges) are subject to annual audit as to their compliance with GAAP.

Explanation:GAAP(Generally accepted accounting principles) is a body saddled with the response of ensuring that financial statements are prepared based on certain principles which includes the following.

OBJECTIVITY, MATERIALITY, CONSISTENCY AND PRUDENCE. All public corporations (those whose stock are traded on exchanges) are subject to annual audit as to their compliance with GAAP which regulates Their Financial statement and reports.