The standards by which the auditor performs an effective audit are known as governmental accounting principles generally accepted accounting principles (GAAP) accounting standards generally accepted auditing standards (GAAS). QUESTION 49 An indirect financial interest for a covered member would be caused by Ownership of shares of stock of the client by dependent children. Ownership of shares of client's stock by spouse. Ownership of single share of client's stock Ownership of mutual fund shares that owns stock in client. QUESTION 50 Which of the following statements is correct regarding the setting of auditing standards in the U.S.? CI The AICPA is responsible for the setting auditing standards for audits of nonpublic entities. The PCAOB is responsible for setting auditing standards for audits of public companies. The AICPA is responsible for setting auditing standards for audits of both public and nonpublic entities. Both (a) and (b) are correct