Which statement about CPAs is correct?

Which statement about CPAs is correct?

• A. CPAs must meet standards set by FASB and AICPA.
• B. CPAs must be employed by the state government
• C. CPAs are prohibited from auditing community associations
• D. CPAs set the community's bylaws

Answer: (A)

CPAs operate under two layers of standards: GAAP, established and maintained through the Financial Accounting Standards Board, and the professional and ethical standards governed by the American Institute of Certified Public Accountants. This combination guides how CPAs prepare, audit, and report financial information, ensuring consistency and reliability across financial statements. That’s why meeting standards set by FASB and AICPA is the correct description. The other statements don’t fit because CPAs aren’t required to be state government employees; they can work in private firms or various settings. CPAs do audit entities like community associations, and they don’t set bylaws for the community.

CPAs operate under two layers of standards: GAAP, established and maintained through the Financial Accounting Standards Board, and the professional and ethical standards governed by the American Institute of Certified Public Accountants. This combination guides how CPAs prepare, audit, and report financial information, ensuring consistency and reliability across financial statements. That’s why meeting standards set by FASB and AICPA is the correct description. The other statements don’t fit because CPAs aren’t required to be state government employees; they can work in private firms or various settings. CPAs do audit entities like community associations, and they don’t set bylaws for the community.