152k views
1 vote
Which of the following is an element of a CPA firm's quality control policies and procedures applicable to the firm's auditing practice?

A.Professional skepticism of management.
B.Computer information processing.
C.Efficiency of organizational structures.
D.Acceptance of a client relationship.

User Sahand
by
8.1k points

1 Answer

3 votes

Final answer:

The element of a CPA firm's quality control policies and procedures relevant to auditing practice is the Acceptance of a client relationship. This ensures the firm takes on engagements it can handle and that comply with legal and ethical standards.

Step-by-step explanation:

The element of a CPA firm's quality control policies and procedures applicable to the firm's auditing practice mentioned in the question is Acceptance of a client relationship. Quality control components for a CPA firm, as outlined by professional standards, include elements such as Human Resources, Engagement Performance, and Client Relationships and Engagement Acceptance. Among these, Acceptance of a client relationship falls directly under the aspect of ensuring that the firm only enters into or continues relationships with clients whose engagements the firm:

  • Competently handle;
  • Comply with legal and ethical requirements;
  • Manage associated risks effectively.

Professional skepticism is a mindset auditors should have during engagements, and while it influences quality control, it is not a control element. Computer information processing might be related to how an audit is conducted but isn't a quality control policy by itself. Efficiency of organizational structures can be a result of good quality control but again is not an element of quality control policies and procedures.

User Toniann
by
8.7k points