a.
Concept Introduction:
Independence Conceptual Framework- The AICPA had issued guidelines which should be followed in conducting an audit. One of these guidelines is independence framework that requires the covered members to be independent in conducting their audit.
Whether an auditor of publicly traded client needs to be independent.
b.
Concept Introduction:
Independence Conceptual Framework- The AICPA had issued guidelines which should be followed in conducting the audit. One of these guidelines is independence framework that requires the covered members to be independent in conducting their audit.
Whether an auditor of a privately held client needs to be independent.
Concept Introduction:
AICPA’s Code of Professional Conduct − AICPA has issued code of professional conduct which helps the auditors and AICPA members in the performance of their professional duties.
To explain:
The meaning of the given term.
c.
Concept Introduction:
AICPA’s Code of Professional Conduct − AICPA has issued a code of professional conduct which helps the auditors and AICPA members in the performance of their professional duties.
To provide:The difference between the given terms.
d.
Concept Introduction:
AICPA’s Code of Professional Conduct − AICPA has issued code of professional conduct which helps the auditors and AICPA members in the performance of their professional duties.
To provide:The details of services prohibited to auditors of publicly traded clients.
Want to see the full answer?
Check out a sample textbook solutionChapter 1 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
- How have the Sarbanes–Oxley Act's requirements impacted a public company's ability to choose its auditors?arrow_forwardWhat additional constraints and obligations do auditors face when offering nonaudit services to public companies?arrow_forwardWhat other restrictions and requirements apply to auditors whenproviding nonaudit services to public companies?arrow_forward
- Why do you think the SEC requires companies to disclose fees paid to independent accountingfirms for audit and consulting services? What must be disclosed?arrow_forwardChoose the correct.Which of the following is not a way by which the Sarbanes–Oxley Act attempts to ensure auditor independence from an audit client?a. The auditing firm must be appointed by the client’s audit committee.b. Audit fees must be approved by the Public Company Accounting Oversight Board.c. The audit committee must be composed of members of the client’s board of directors who are independent of the management.d. The external auditor cannot also perform financial information system design and implementation work.arrow_forwardDo you believe that the SEC should prohibit auditors from providing all nonaudit services for audit clients? Use ethical reasoning to support your answer.arrow_forward
- What consulting or nonaudit services are prohibited for auditors of public companies? What other restrictions and requirements apply to auditors when providing nonaudit services to public companies?arrow_forwardHow have provisions of the Sarbanes–Oxley Act limited a public company’s choice of auditors?arrow_forwardWhat is a law, such as the Sarbanes–Oxley Act of 2002, under which auditors have obligations?arrow_forward
- Which of the following is not a way by which the Sarbanes–Oxley Act attempts to ensure auditor independence from an audit client?a. The auditing firm must be appointed by the client’s audit committee.b. Audit fees must be approved by the Public Company Accounting Oversight Board.c. The audit committee must be composed of members of the client’s board of directors who are independent of the management.d. The external auditor cannot also perform financial information system design and implementation work.arrow_forwardWhich one of the following is NOT a duty of the auditor? Duty to report on any violation of law Duty to report to the members Duty to report to the company’s bankers Duty to sign the audit reportarrow_forwardA BDO audit client subject to SEC independence rules make financial reporting software. The audit client wants BDO to become a reseller of their software. The terms would be the same as those offered to any other reseller. The relationship would be immaterial to both BDO and the client. Is this permitted under SEC rules? Yes, because it is immaterial to both parties. No, because reseller arrangements are business relationships and the SEC does not permit the audit firm to have a business relationship with an audit client. Yes, because BDO is not the only reseller and would be offered the same terms as any other reseller.arrow_forward
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage LearningAuditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
- Business/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:Cengage