If a lawyer refuses to furnish corroborating information regarding litigation, claims, and assessments. the auditor should: disclose this fact in a footnote to the financial statements. seek to obtain the corroborating information from management. C) consider the refusal to be a scope limitation. D) honor the confidentiality of the client-lawyer relationship.

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Statement 1: An entity wherein the client has a nominal interest, is considered a related. Statement 2: lf the auditor performed analytical procedures in the audit completion phase and discovers a previously unrecognized risk, the auditor shall issue an adverse opinion. Statement 3: One of the management's responsibilities regarding related party transactions is to properly account for and disclose such transactions.  A. Only one statement is correct  B. Only two statements are correct C. All statements are correct  D. All statements are incorrect

What types of actions may an auditor be liable to a client under common law? Why would the clients prefer to sue the auditor for tort action rather than a breach of contract?

Generally, the auditor could be legally liable under?   Select one: a. contract law but not under the tort of negligence to third parties b. the tort of negligence to the client and contract law c. the tort of negligence but not contract law to the client d. contract law to third parties and to the client

s1: Client's representations, both written or oral, are not considered to be a persuasive type of evidence that the auditor obtains. s2: To substantiate the information provided by management about litigation, claims, and assessments, the auditor should ask the client to send letters of audit inquiries to its lawyers.    a. BOTH STATEMENTS ARE TRUE b. BOTH STATEMENTS ARE FALSE c. ONLY S1 IS TRUE d. ONLY S2 IS TRUE

A CPA should disclose confidential client information without the consent of the client to: Another CPA firm that has taken over the audit for the client. A PCAOB inspection team. Another CPA firm if the information concerns suspected GAAP violations. All of the above.

S1: A client imposed scope limitation will generally result in a disclaimer of opinion S2: When there is a significant question about a company's ability to remain a going concern, the report issued is usually unqualified with an explanatory paragraph. S3: When the auditors are unable to comply with generally accepted auditing standards, they should issue an opinion that is unqualified, but include an additional explanatory paragraph in the report.    a. All statements are true b. All statements are false c. S1 and S2 are true d. S1 is true

Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 18,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Icebreaker enters into a forward contract to purchase 18,000 dinars on March 1, 2021. Relevant exchange rates for the dinar on various dates are as follows:   Date Spot Rate Forward Rate(to March 1, 2021) December 1, 2020 $ 3.60   $ 3.675   December 31, 2020   3.70     3.800   March 1, 2021   3.85     N/A       a-2. What is the impact on 2020 net income? a-3. What is the impact on 2021 net income? a-4. What is the impact on net income over the two accounting periods?

Smith CPAs have requested that an audit client add a note disclosure to the financial statements related to their ability to operate as a going concern. The client has refused to do so; citing differences in opinion on some key loans that they believe will be refinanced. What should the auditors do at this point? The auditors should request a meeting with the client's board of directors, and discuss the issue with them. The auditors should consider modifying the opinion for a material departure. The auditors should consider disclaiming an opinion on the financial statements to preserve the reputation of the firm. The auditors should consider issuing a scope limitation, on the basis that management is not willing to make the necessary amendment.