Chapter 1 Multiple-Choice Questions |1. |Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial | |easy |information for decision making is commonly called: | |c |a. finance. | |
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audits, verifications, and “other” attestation services. c. reviews, verifications, and “other” attestation services. d. audits, reviews, and verifications. 5. (SOX) easy The organization that is responsible for providing oversight for auditors of public companies is called the ________. d a. Auditing Standards Board. b. American Institute of Certified Public Accountants. c. Public Oversight Board. d. Public Company Accounting Oversight Board. 6. (SOX) The Sarbanes-Oxley Act
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different companies. It is possible that these recommendations will constitute regulatory overreach. At minimum there could be measures that require continuing education for board members so that they remain current in their knowledge of best corporate practices. Another weakness of the bill is that it does not provide protection for auditors who want to report fraud but worry about potential retaliation. Legislation could be created, requiring that no auditors can be fired unless a super majority of the
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Standards, also known as GAAS, is a rather broad topic with many guidelines to follow. An independent auditor plans, conducts, and reports the results of an audit in accordance with generally accepted auditing standards. A short definition of GAAS is the set of systematic guidelines used by auditors when conducting audits on companies' finances, ensuring the accuracy, consistency and verifiability of auditors' actions and reports (Investopedia). There are a total of 10 standards that are broke up into three
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evidence. Probably, the first step is to report the matter to the chairman of the board. Circumstances, however, may require that the matter be referred to an external body such as the Securities and Exchange Commission, Justice Department, Bureau of Internal Revenue, or the shareholders. Case 2 The appropriate action depends on the type
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independent of CA (i.e. there’s no conflict of interest) 5. Communicate with the predecessor auditor These procedures are required by the GAAS. Audit Procedure #3 Non-financial: Stealing trade secrets: the integrity of Dupuis and CA employees is called into question. Will Mr. Dupuis and CA employees answer auditor’s question honestly and faithfully? Response from the predecessor auditors: Change of auditors causes some concerns. What does it mean that CA needs a “fresh perspective”? What are
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of the 19th century. Answer: True Difficulty: Medium 2. The American Institute of Certified Public Accountants issues CPA certificates and permits CPAs to practice. Answer: False Difficulty: Medium 3. A company is either audited by the GAO or internal auditors, but not both. Answer: False Difficulty: Easy 4. The SEC does not pass on the merits of the securities that are registered with the agency. Answer: True Difficulty: Medium 5. The American Institute of Certified Public Accountants has the primary
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........................................................................................................... 23 ThE aUDiTor anD ThE CompaniES aCT............................................................................. 25 CHAPTER THREE ..................................................................................................................... 47 aUDiT planninG, ConTrol & rECorDinG (iSa 300)........................................................ 49 CHAPTER FOUR ....................
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TESTBANKS / REVIEWERS 1. When an auditor believes that an understanding with the client has not been established, he or she should ordinarily a. Perform the audit with increase professional skepticism. b. Decline to accept or perform the audit. c. Assess control risk at the maximum level and perform a primarily substantive audit. d. Modify the scope of the audit to reflect an increased risk of material misstatement due to fraud. 2. An auditor should design the written audit program
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Along with the evolution of standards and procedure are necessary to ensure economic growth and financial stability. Before 2002, it seems as though auditing took a reactive approach to questionable circumstances and dealings. Today the powers in control are producing a proactive approach. That is to say, standards and regulations are set in place to ensure users of financial data are getting timely and accurate reports. Elements of Generally Accepted Auditing Standards Information and history regarding
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