Which of these statements is/are correct?I lf an auditor had the required knowledge and intentionally failed to fulfill a certain requirement in thecontract, they may be guilty of contract fraud.II Reasons for increased litigation against auditors include recession and tough economic timesresulting in business failures.Select one:O a. Only II is correct.b.Both (1) and (1) are correct.Both (1) and (11) are incorrect.O d. Only I is correct.

Audit means checking of financial statements of a company.

Which of these statements is/are correct? | If an auditor had the required knowledge and intentionally failed to fulfill a certain requirement in the contract, they may be guilty of contract fraud. |I Reasons for increased litigation against auditors include recession and tough economic times resulting in business failures. Select one: O a. Only II is correct. O b. Both (1) and (II) are correct. C. Both (1) and (11) are incorrect. d. Only I is correct.

Which of these statements is/are correct? | If an auditor had the required knowledge and intentionally failed to fulfill a certain requirement in the contract, they may be guilty of contract fraud. |I Reasons for increased litigation against auditors include recession and tough economic times resulting in business failures. Select one: O a. Only II is correct. O b. Both (1) and (II) are correct. C. Both (1) and (11) are incorrect. d. Only I is correct.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Determine whether statement 1 and 2 are true or false 4. S1 - Generally, the more reliable internal controls are, the lesser the substantive test procedures the auditor would need to perform in auditing year-end account balances S2 - The industry in which the client operates may give rise to specific risks of material misstatements arising from the nature of the business or the degree of regulation a. False, False b. True, False c. False, True d. True, True
multiple choice explain reason for correct and incorrect option in detail
When creditors who relied on an entity’s audited financial statements suffer monetary lossesafter a customer (the auditors’ client) goes bankrupt, what must the plaintiff creditors in alawsuit for damages show in a court that follows the doctrine in Credit Alliance?a. The auditors knew and specifically acknowledged identification of the creditors.b. The auditors could reasonably foresee them as beneficiaries of the audit because entitiessuch as this client use financial statements to obtain credit from vendors.c. The plaintiffs were foreseen users of the audited financial statements because they werevendors of long standing.d. All of the above
5 The auditor cannot find all immaterial errors and fraud due to reasons like: Question 5 options: a) Time b) Cost c) Impracticable d) All of the above
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
Which of the following conditions or events would most likely cause an auditor to have substantial doubt about an entity's ability to continue as a going concern? Select one: O a. Significant increase in related-party transactions. O b. Research and development projects are postponed. O c. The CEO, who is key to the company's operations, resigned. O d. All of the options are correct.
19. An auditor conducting an audit in accordance with ______________is responsible for obtaining reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error. a. ISAs b. None of the options c. IFRS d. IAS
Question 4 Respond to each of the following independent situations involving auditor reports. For each scenario (1)identify the reporting issue involved; (2) explain the type of opinion that should be issued; (3) identify any requiredmodifications of the standard auditor'sreport. The auditor has a disagreem ent with a client overthe adequacy of the recorded bad debt expense and allowance for doubtful accounts. The auditor is convinced that the expense and allowance are understatedby amaterial (but not highly material) amount, but the client has refused to adjust the accounts. 1.4 The auditor has issued a report on a client's financial statem ents prepared on a regulatory basis of accounting. The auditor is also preparing to issue a separate report- on the same client's GAAP financial statements, which will be issued to the public. The auditor feels that the issuance of the report on the regulatory basis statements should be disclosed in the report on the GAAP statements. The auditor…
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An unqualified opinion: a) is given when there is a conflict of interest.b) is one made without reservation.c) © is made when auditors are not fully qualified to audit the financial statements.d- is one made with reservation
{Auditing} 33. The auditor shall express ________opinion when he concludes that there are possibilities of material misstatements that are pervasive to the financial statements. a. Adverse b. Qualified c. None of the options d. Disclaimer
TRUE OR FALSE1. WHEN OBTAINING AN UNDERSTANDING OF CONTROL ACTIVITIES OF A RELATIVELY SMALL CLIENT, THE AUDITOR IDENTIFIED NO CONTROL ACTIVITIES, THE AUDITOR WOULD PROBABLY SET A HIGH ASSESSMENT OF CONTROL RISK2. WHEN A COMPANY DESIGNS AND IMPLEMENTS INTERNAL CONTROLS, COST OF THE CONTROLS IS NOT A VALID CONSIDERATION.3. AUDITING STANDARDS PROHIBIT RELIANCE ON THE WORK OF INTERNAL AUDITORS DUE TO THE LACK OF INDEPENDENCE OF THE INTERNAL AUDITORS