incorrect. Suggesting that there should be procedures to decide whether to accept a client does
not imply that a firm has a duty to anyone but itself with respect to the acceptance, rejection, or
retention of clients.
Choice "d" is incorrect. The decision to express an unqualified opinion should be made after the
completion of the audit, not upon client acceptance.
QUESTION: 182
A CPA firm evaluates its personnel advancement experience to ascertain whether individuals
meeting stated criteria are assigned increased degrees of responsibility. This is evidence of the
firm's adherence to which of the following prescribed standards:

A. Professional ethics.
B. Supervision and review.
C. Accounting and review services.
D. Quality control.

Answer(s): D
Explanation:
Choice "d" is correct. The AICPA's Statements on Quality Control Standards assert that
professional development policies and procedures should be established by the firm in order to
provide reasonable assurance that personnel will have the knowledge required to perform their
work and progress within the firm. Choice "a" is incorrect. The auditors' responsibility is to the
public and is defined in the "AICPA Code of Professional Conduct," which includes a set of
mandatory rules and which derives its authority from the bylaws of the AICP
A. Choice "b" is incorrect. Supervision and review are part of GAAS fieldwork standards. Choice
"c" is incorrect. Accounting and review services pertain to the unaudited financial statements of
a nonpublic company.
QUESTION: 183
The primary purpose of establishing quality control policies and procedures for deciding whether
to accept new clients is to:

A. Minimize the likelihood of association with clients whose management lacks integrity.
B. Monitor significant deficiencies in the design and operation of the client's internal control.
C. Identify noncompliance with aspects of contractual agreements that affect the financial
statements.
D. Provide reasonable assurance that personnel wil be adequately trained to fulfil their
assigned responsibilities.

Answer(s): A
Explanation:
Choice "a" is correct. Policies and procedures should be established for deciding whether to
accept a new client in order to minimize the likelihood of association with a client whose
management lacks integrity. Choice "b" is incorrect. Policies and procedures established for
deciding whether to accept a new client would not aid in monitoring internal control deficiencies.
A review of internal control would not occur until after a new client was accepted. Choice "c" is
incorrect. Policies and procedures established for deciding whether to accept a new client would
not aid in identifying noncompliance with contractual agreements. Reviewing the terms of
contractual agreements would not occur until after a new client was accepted. Choice "d" is

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