Rocky Point Brewery (RPB) plans to file an initial public offering (IPO) in December 20X4. The IPO filing will include calendar year-end financial statements for 20X1, 20X2, and 20X3. Olsen & Alain, CPAs (O&A) has performed calendar year end audits of RPB since 20X0 and also helped RPB prepare monthly financial statements in accordance with AICPA independence rules. O&A terminated the accounting services in December 20X2. Which statement best describes why O&A may continue to perform RPB's audit when it files its IPO under SEC independence rules? a. O&A's fee for auditing the combined company will be less than 5% of its revenues. b O&A performed only permissible accounting services during the period covered by the financial statements. c. O&A will pay for an independent firm to reperform the accounting services for all periods in the filing. d. O&A will be independent under SEC independence rules for the most recent year included in the IPO filing.
Rocky Point Brewery (RPB) plans to file an initial public offering (IPO) in December 20X4. The IPO filing will include calendar year-end financial statements for 20X1, 20X2, and 20X3. Olsen & Alain, CPAs (O&A) has performed calendar year end audits of RPB since 20X0 and also helped RPB prepare monthly financial statements in accordance with AICPA independence rules. O&A terminated the accounting services in December 20X2. Which statement best describes why O&A may continue to perform RPB's audit when it files its IPO under SEC independence rules?
a. O&A's fee for auditing the combined company will be less than 5% of its revenues.
b O&A performed only permissible accounting services during the period covered by the financial statements.
c. O&A will pay for an independent firm to reperform the accounting services for all periods in the filing.
d. O&A will be independent under SEC independence rules for the most recent year included in the IPO filing.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
