"Audit Risks" Please respond to the following:
From
the e-Activity, analyze whether or not investors who were misled by
relying on financial statements could hold the audit firm liable for
audit failure either by common or securities laws. Provide a rationale
for your response. According to an article in the CPA Journal,
the accounting profession has long contended that an audit conducted in
accordance with generally accepted auditing standards (GAAS) provides
reasonable assurance that there are no material misstatements contained
within financial statements. Suggest at least two (2) alternative
methods that auditors can use to provide a more concrete level of
assurance to investors. Provide support for your responses with examples
of such methods in use. Week 3 Homework Submission Click the link above to submit your assignment.
Chapter 5: Problems 5-18, 5-20(a-d), and 5-22(a-e) Chapter 6: Problems 6-23(a-b), 6-25, and 6-32(a-g) quiz 2
Acct403 Quiz 2
Question 1
Which of the following is least likely to cause uncertainty about the
ability of an entity to continue as a going concern?
Answer
Question 2
If most or all users' decisions that are based on the financial statements are
likely to be significantly affected, the materiality level is:
Answer
Question 3
The standard unqualified audit report for a non-public entity must:
Answer
Question 4
The audit report date on a standard unqualified report indicates:
Answer
Question 5
The standard unqualified audit report for public entities includes the
following three paragraphs:
Answer
Question 6
The auditor's responsibility section of the standard unqualified audit report
states that the audit is designed to:
Answer
Question 7
Auditing standards for public companies are established by the:
Answer
Question 8
The auditor's responsibility section of the standard audit report states that
the auditor is:
Answer
Question 9
The term "explanatory paragraph" was replaced in the AICPA auditing
standards with:
Answer
Question 10
If the phrase "except for" is present in the opinion paragraph of
the audit report, the auditor has issued a(n):
Answer
Question 11
The first step to be followed when deciding the appropriate audit report in a
given set of circumstances is to:
Answer
Question 12
Items that materially affect the comparability of financial statements
generally require disclosure in the footnotes. If the client refuses to
properly disclose the item, the auditor will most likely issue:
Answer
Question 13
When the auditor determines that the financial statements are fairly stated,
but there is a nonindependent relationship between the auditor and the client,
the auditor should issue:
Answer
Question 14
A misstatement in the financial statements can be considered material if
knowledge of the misstatement will affect a decision of:
Answer
Question 15
Whenever the client imposes restrictions on the scope of the audit, the
auditor should be concerned that management may be trying to prevent discovery
of misstatements. In such cases, the auditor will likely issue a:
Answer
Question 16
The Sarbanes-Oxley Act ________ a CPA firm from doing both bookkeeping and
auditing services for the same public company client.
Answer
Question 17
When a member observes the profession's technical and ethical standards and
strives to continually improve her competence and quality of services, she is
exercising:
Answer
Question 18
The CPA must not subordinate his or her professional judgment to that of
others in any:
Answer
Question 19
Interpretations of the rules regarding independence allow an auditor to serve
as:
Answer
Question 20
Rule 301 of the AICPA's Code of Professional Conduct requires CPAs to maintain
the confidentiality of client information. This rule would be violated if a
CPA disclosed information without a client's consent as a result of a:
Answer
Question 21
The financial interests of a CPA's family members can affect the CPA's
independence. Which of the following parties wouldnot be included as a "direct
financial interest" of the CPA?
Answer
Question 22
Ethics are:
Answer
Question 23
Which of the following services are allowed by the SEC whenever a CPA also
audits the company?
Answer
Question 24
A CPA firm:
Answer
Question 25
The Sarbanes-Oxley Act requires a cooling off period of ________ before a
member of an audit team can work for a client in a key management position?
Answer
Question 26
Of the four parts of the AICPA's Code of Professional Conduct, which part is
enforceable?
Answer
2 points
Question 27
Freedom from ________ means the absence of relationships that might interfere
with objectivity or integrity.
Answer
Question 28
Which of the following is required for a firm to designate itself "Member
of the American Institute of Certified Public Accountants" on its
letterhead?
Answer
Question 29
The AICPA's Code of Professional Conduct requires independence for all:
Answer
Question 30
The members of a client's "audit committee" should be:
Answer
Solution: Strayer ACC403 week 3 assignment, discussion and quiz