ExpertHard1 markMultiple Choice
CPA · Question 08 · Area I: Ethics & General Principles
A firm is designing its system of quality management. According to SQMS No. 1 (Statement on Quality Management Standards), which of the following is a required component of the system of quality management?
A firm is designing its system of quality management. According to SQMS No. 1 (Statement on Quality Management Standards), which of the following is a required component of the system of quality management?
Answer options:
A.
Peer review.
B.
Information and communication.
C.
Capital adequacy.
D.
Market share analysis.
How to approach this question
Recall the components of SQMS 1 (formerly SQCS).
Full Answer
B.Information and communication.✓ Correct
SQMS No. 1 identifies eight components of a system of quality management: 1) The firm's risk assessment process, 2) Governance and leadership, 3) Relevant ethical requirements, 4) Acceptance and continuance, 5) Engagement performance, 6) Resources, 7) Information and communication, and 8) The monitoring and remediation process.
Common mistakes
Confusing the old SQCS elements with the new SQMS risk-based approach components.
Practice the full CPA AUD Practice Exam 5
78 questions · hints · full answers · grading
More questions from this exam
Q01A CPA firm is auditing the financial statements of a nonissuer, TechInnovate Inc. The lead engage...HardQ02During the audit of an issuer, Gamma Corp, the audit firm proposes to provide tax services to the...HardQ03An auditor is performing a Yellow Book audit (GAO Government Auditing Standards) for a state agen...HardQ04A CPA is engaged to audit the financial statements of a nonissuer. During the audit, the CPA enco...HardQ05Before accepting an audit engagement for a new nonissuer client, the successor auditor is require...Hard