Seria, Inc. has received a bulk order from an overseas client. As a result, the reported earnings of this year are expected to be significantly higher than the estimates of financial analysts. Joshua, an accountant at Seria, tells this to one of his friends. Which of the IMA standards has Joshua violated?

Seria, Inc. has received a bulk order from an overseas client. As a result, the reported earnings of this year are expected to be significantly higher than the estimates of financial analysts. Joshua, an accountant at Seria, tells this to one of his friends. Which of the IMA standards has Joshua violated?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

25. An audit firm has been asked by a client to attend a meeting between the client and its prospective investors in order to discuss the company’s financial performance in the last year. According to the Code of Professional Ethics for Accountants, what type of threat to objectivity will be created if the auditor attends this meeting? a. Advocacy threat b. Self review threat c. Self-interest threat d. Intimidation threat
What is NOT an example of rationalization as one of the three elements causing a person to commit fraud? CA The company will never miss it CB. Employer pressure to report fictitious accounting results c. This replaces my bonus that was suspended this year CD. I will repay the "loan" before anyone misses it
(a) What are the auditor's responsibilities for 'going concern assumptions’'? (b) Maxim Stewart is the partner in charge of the audit for a new client, Southern Southerland(SS). The client engaged Maxim's audit firm in November 2017, in preparation for the 2018audit. From 30 January 2018 onwards, SS has consistently paid its suppliers late, well in excessof the suppliers' agreed credit terms. This has resulted in some suppliers demanding cash ondelivery from SS. Maxim is also aware from his review of correspondence between SS and itsbank that the company has been experiencing cash flow problems since 2016. Required: Identify any significant events or conditions that individually or collectively may cast significant doubt on SS's ability to continue as a going concern.
SEC Independence and Nonaudit Services. Is independence impaired on these SEC filingaudits according to SEC independence rules regarding nonaudit services?a. CPA Dakota Tidrick is a staff assistant II auditor on the Section Co. audit. Upon theaudit completion date in January, Tidrick drafted the balance sheet, income statement,comprehensive income statement, statement of cash flows, and notes for review by theengagement partner before the auditors’ report was finalized.b. CPA Mel Carnes is a manager in the firm’s consulting division. He spent 100 hours withthe Section Co. audit client on an accounts payable information system study, whichinvolved selecting the preferred software and supervising Section Co.’s employees instartup operations.
(a) What are the auditor's responsibilities for 'going concern assumptions": (b) Maxim Stewart is the partner in charge of the audit for a new client, Southern Southerland (SS). The client engaged Maxim's audit firm in November 2017, in preparation for the 2018 audit. From 30 January 2018 onwards, SS has consistently paid its suppliers late, well in excess of the suppliers' agreed credit terms. This has resulted in some suppliers demanding cash on delivery from SS. Maxim is also aware from his review of correspondence between SS and its bank that the company has been experiencing cash flow problems since 2016. Required: Identify any significant events or conditions that individually or collectively may cast significant doubt on SS's ability to continue as a going concern
Match each of the numbered descriptions 1 through 7 with the term or phrase it best reflects. Indicate your answer by writing the letter A through G for the term or phrase in the blank provided. A. Ethics B. Fraud triangle C. Prevention D. Internal controls E. Sarbanes-Oxley Act 1. Requires the SEC to pay whistleblowers. 2. Examines whether financial statements are prepared using GAAP; it does not ensure absolute accuracy of the statements. 3. Requires documentation and verification of internal controls and increases emphasis on internal control effectiveness. 4. Procedures set up to protect company property and equipment, ensure reliable accounting, promote efficiency, and encourage adherence to policies. 5. A less expensive and more effective means to stop fraud. 6. Three factors push a person to commit fraud: opportunity, pressure, and rationalization. 7. Beliefs that distinguish right from wrong.
What are the auditor's responsibilities for 'going concern assumptions’'? Maxim Stewart is the partner in charge of the audit for a new client, Southern Southerland (SS). The client engaged Maxim's audit firm in November 2017, in preparation for the 2018 audit. From 30 January 2018 onwards, SS has consistently paid its suppliers late, well in excess of the suppliers' agreed credit terms. This has resulted in some suppliers demanding cash on delivery from SS. Maxim is also aware from his review of correspondence between SS and its bank that the company has been experiencing cash flow problems since 2016. Required: Identify any significant events or conditions that individually or collectively may cast significant doubt on SS's ability to continue as a going concern
119-Mr. Abdullah is an auditor in XYZ LLC. His job is to see the correctness of financial statements and to give suggestions. He came to know that his company is entering into a new product line, so he started discussing about it on various places and about its projection in the future. In this situation there is a chance of a. Advocacy threat b. Familiarity threat c. Self review threat d. None of the options
Mr. Bader is leaving the accounting practice to become the Finance Director of a client company. The ethical dilemma he is most likely to face would be a. Objectivity b. Integrity c. Professional Behavior d. Confidentialit
You were assigned to audit the financial statements of Swansea Corporation as at and for the year ended December 31, 2021. Your senior asked you to draft a memo on materiality and tolerable error for your client. Swansea Corporation has incurred substantial net losses due to COVID-19 pandemic. Up to 2019, it has been profitable. Which of the following is least likely to be your starting point in computing materiality? Group of answer choices Normalized net income Net loss Total assets Normalized revenue
3. A violation of the code of ethics would most likely have occurred when a CPA a. Issued an unqualified opinion on the 2019 financial statements when fees for 2018 audit are still unpaid. b. Purchased a bookkeeping firm's practice of monthly write-ups for a percent- age of fees received over a 3-year period. c. Made arrangements with a bank to collect notes issued by a client in payment of his dues. d. Joined a firm made up of three non-CPA practitioners. 4. A violation of the code of ethics would least likely have occurred when a CPA in public practice a. Referred life insurance assignments to the CPA’s spouse who is a life insurance agent. b. Served simultaneously as a provincial board member and practice public accounting in the same province. c. Used a records retention agency to store the CPA's working papers and client's records. d. Served as an expert witness in a damage suit and received compensation based on the amount awarded to the plaintiff.
Barbara Wells is a first-year auditor for a large public accounting firm. She was assigned to audit Larson Brothers; the CEO of Larson is her brother. She discussed some of her findings with family members. What is the relevant requirement (s) for the ethical behavior of an auditor? a. Qualified to carry out the scope of service b. Confidential c. All of those listed d. Independence