Final answer:
The statement that quality control is unnecessary for small CPA firms is false. All CPA firms, independent of size, must adhere to quality control standards to ensure they provide accurate, professional services and comply with professional, ethical standards.
Step-by-step explanation:
The statement that quality control policies and procedures are necessary for large CPA firms, but not for small CPA firms is false. Quality control within CPA firms, regardless of size, is essential to ensure that they provide clients with accurate, professional, and ethical services.
These policies and procedures are designed to maintain high standards of auditing and accounting practices, and help protect the public interest by ensuring the integrity and quality of the financial information that firms audit, review, and compile.
Small CPA firms must adhere to appropriate quality controls just as rigorously as larger firms to ensure compliance with professional standards, to manage risk effectively, and to maintain their professional reputation. The American Institute of Certified Public Accountants (AICPA) provides a framework called 'Statements on Quality Control Standards' (SQCS) that applies to all CPA firms in practicing auditing and other professional services.
It specifies that firms should monitor their performance with policies and procedures that cover the elements of quality control, which includes engagement performance, client acceptance, and human resources.