Conclude and explain, with reference to the IPPF (code of ethics or standards) whether it is permissible or not permissible. Provide reason for your conclusion; 1.The CAE resolved not to report a significant finding about an illegal environmental activity to the audit committee because management had indicated that they would handle the issue.

ASA570.10 requires the auditor to particularly evaluate the going concern problems and the related risk as part of the audit strategy and processes. What are the implications and the consequences for the audit if it is concluded that the going concern assumption is inappropriate and, as a result, the entity being audited is highly unlikely to continue in business in the foreseeable future? In your response and in your own words, discuss six (6) typical indicators of going concern problems and state the considerations and the additional procedures which should be included as part of the audit program.

Roger Royce, CPA, has encountered a situation that he thinks may pose a threat to his independence with respect to Watson, Incorporated an audit client. The situation is not addressed by an independence rule or regulation. Using the AICPA Conceptual Framework for Independence Standards, describe how Royce can determine whether the threat truly impairs his independence.

1. What is auditor independence, and what is its significance to the audit profes- sion? Based on the case information, do you believe that Andersen violated the second general standard? Why or why not? 2. Refer to the responsibilities principle of Generally Accepted Auditing Stan- dards (GAAS). Given the reluctance of WorldCom’s management team to communicate with Andersen, do you believe that Andersen exercised due care and professional skepticism in completing the audit? Why or why not? 3. In terms of audit effectiveness and efficiency, briefly explain the difference between substantive analytical procedures and substantive tests of details. Do you believe it was appropriate for Andersen to rely primarily on sub- stantive analytical procedures? Why or why not? 4. Consult Paragraphs 14 and A8 (in Appendix A) of PCAOB Auditing Standard No. 5. Provide an example of both a preventive control and a detective control that could address the risk that a fraudulent top-side adjusting journal…

At the completion of the audit, management is asked to make a written statement that it is not aware of any undisclosed contingent liabilities. This statement would appear in the:   a. Engagement letter. b. Management letter. c. Management representation letter. d. Legal representation letter.

An auditor has concluded that substantial doubt exists and that the client will not be able to meet its obligations as they become due for a reasonable period of time. Financial statement and footnote disclosures are adequate, detailing the conditions, events, and management's plans to alleviate the doubt. However, the CPA believes that substantial doubt remains. The CPA must add a Going Concern section to the audit report, discussing the Substantial Doubt. How should the audit opinion be modified? a. No modification. b. A qualified opinion. c. An adverse opinion. d. A disclaimer of opinion.

Grounds for Dismissal. This case is designed like the ones in the chapter. Your assignment is to write the “audit approach” portion of the case organized around these sections: Objective. Express the objective in terms of the facts supposedly asserted in financial records, accounts, and statements.Control. Write a brief explanation of desirable controls, missing controls, and especially the types of “deviations” that might arise from the situation described in the case.Tests of controls. Write some audit procedures for getting evidence about existing controls, especially procedures that could discover deviations from controls. If there are no controls to test, then there are no procedures to perform; go to the next section. A “procedure” should instruct someone about the source(s) of evidence to tap and the work to do. Audit of balance. Write some procedures for getting evidence about the existence, completeness, valuation or allocation, or rights and obligations assertions identified…

Question 1 For each of the following scenarios, indicate whether in your opinion it is a violation of the HKICPA Code of Ethics. Specifically, for each scenario, choose one of the following options: (1) not likely to be a violation; (2) likely to be aviolation; or (3)clearly a violation. For each scenario, clearly explain your reasoning. 1.→Tong and Tong CPAS recently completed the audit of the Michaels Corporation and- issued an unqualified opinion on the financial statements. Subsequent to the issuance of the financial statem ents and auditor'sreport, the Securities and Futures Commission: (SFC) initiated an investigation into possible illegal acts engaged in by Michaels Corporation, andhas requesteda copy of all the auditing documentation prepared by: Tong and Tong. Michaels Corporation has contacted Tong and Tong and threatenedto: take legal action against the audit firm if the auditors provide the auditing documentation to the SFC. Michaelsmaintains that the information is…

STATEMENT 1: Significant unexpected fluctuations identified by analytical review procedures will usually necessitate a review of internal control. STATEMENT 2: Working papers should generally contain the nature and extent of audit procedures done, the results of any testing, and the CPA's conclusion about how the findings will affect his report. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correct

Which of the following controls will most likely justify a reduced assessed level ofcontrol risk for the existence assertion for equipment?(1) Internal auditors periodically select equipment items in the fixed assets masterfile and locate the related equipment on company premises.(2) Department heads are asked to provide information to the accounting department each quarter about any equipment no longer in use or somewhat damaged.(3) All contracts of equipment purchases are reviewed by both the controller andattorney to verify that legal title transfers to the client and that none representoperating leases.(4) As part of quarterly and annual inventory physical counts, factory equipment islisted and subsequently reconciled to the fixed asset master file.