Question

Which of the following is correct regarding the types of audits over which the ASB and the PCAOB, respectively, have standard-setting authority in the United States?

a) ASB governs financial audits; PCAOB governs all audits of public companies
b) ASB governs all audits of public companies; PCAOB governs financial audits
c) ASB governs audits of private companies; PCAOB governs audits of government entities
d) ASB governs audits of government entities; PCAOB governs financial audits

Answer 1

The ASB oversees financial audits for private companies, and the PCAOB is in charge of standard-setting for all audits of public companies in the U.S.

Step-by-step explanation:

The correct answer regarding the types of audits over which the Auditing Standards Board (ASB) and the Public Company Accounting Oversight Board (PCAOB) have standard-setting authority in the United States is: (a) ASB governs financial audits; PCAOB governs all audits of public companies. The ASB is a senior technical committee of the American Institute of Certified Public Accountants (AICPA) and sets standards for private companies, while the PCAOB oversees the audits of public companies and sets the standards for such audits to promote investor protection.