Contemporary Auditing
11th Edition
ISBN: 9781337650380
Author: KNAPP
Publisher: Cengage
expand_more
expand_more
format_list_bulleted
Question
error_outline
This textbook solution is under construction.
Students have asked these similar questions
Why do you think the SEC requires companies to disclose fees paid to independent accountingfirms for audit and consulting services? What must be disclosed?
How have the Sarbanes–Oxley Act's requirements impacted a public company's ability to choose its auditors?
From the Auditor's point of view, what is your recommendations and solution about Enron's Accounting Scandal?
Knowledge Booster
Similar questions
- Which of the following is NOT an implication of Section 302 of SOX?a. Auditors must determine whether changes in internal control have materially affected, or are likely to materially affect, internal control over financial reporting.b. Auditors must interview management regarding significant changes in the design or operation of internal control that occurred since the last audit.c. Corporate management (including the CEO) must certify monthly and annually their organization’s internal controls over financial reporting.d. Management must disclose any material changes in the company’s internal controls that have occurred during the most recent fiscal quarter.arrow_forwardThe SEC requires registrants to have their quarterly financial statements reviewed by an independent accounting firm but does not mandate that a review report be included in a Form 10-Q. Under what circumstances must a review report accompany quarterly financial statements in a 10-Q? Why doesn't the SEC routinely require public companies to include their review reports in their 10-Q filings?arrow_forwardWhich of the following is not correct with regard to the Public Company Accounting Oversight Board?a. The board can expel a registered auditing firm without SEC approval.b. All registered auditing firms must be inspected at least every three years.c. The board members must be appointed by Congress.d. The board has the authority to set auditing standards rather than utilize the work of the Auditing Standards Board.arrow_forward
- KPMG is the auditor for an IESBA public interest entity audit client. Which non-audit service is permitted for this type of audit client? Designing a technology system for financial reporting that generates information significant to the accounting records. Preparing annual tax returns subject to review by the client and appropriate assessment of threats and safeguards. Valuations that might create a self-review threat. Tax calculations for the purpose of preparing the accounting entries included in the financial statements on which the firm will express an opinion.arrow_forwardThe Overstock-Grant Thornton dispute was publicly aired via disclosure statements filed with the SEC. What impact do you believe those disclosures had on the investing public's confidence in the financial reporting domain and the independent audit function? Were the interactions between Overstock and Grant Thornton unprofessional or otherwise inappropriate? Explain.arrow_forwardWhat other restrictions and requirements apply to auditors whenproviding nonaudit services to public companies?arrow_forward
- What possible actions would an auditor might take if a client’s financial statements depart from GAAP. Would the demand for assurance services increase or decrease in the future?arrow_forwardUnder the Private Securities Litigation Reform Act (the Act), independent auditors are required to firsta. Report in writing all instances of noncompliance with the Act to the client’s board of directors.b. Report to the SEC all instances of noncompliance with the Act they believe have a material effect on financial statements if the board of directors does not first report to the SEC.c. Report clearly inconsequential noncompliance with the Act to the audit committee of the client’s board of directors.d. Resign from the audit engagement and report the instances of noncompliance with the Act to the SEC.arrow_forwardChoose the correct. Which of the following is not correct with regard to the Public Company Accounting Oversight Board?a. The board can expel a registered auditing firm without SEC approval.b. All registered auditing firms must be inspected at least every three years.c. The board members must be appointed by Congress.d. The board has the authority to set auditing standards rather than utilize the work of the Auditing Standards Board.arrow_forward
- Which non-audit service is permitted for an SEC audit client? Preparing a point-in-time gap analysis on its technology controls compared to industry standards. Providing a technology service that records accounting entries for the client. Loaning staff to prepare the client’s tax return. Loaning staff to assist with the client’s internal audit function.arrow_forwardFrom the article below, 1) What caused the SEC to question EY's independence? 2). Explain the findings in the history for EY's other instances where its independence was called into question. Accounting reform occurred after significant corporate misconduct was discovered in the early 1980s. Some of the reform sought to require public companies to put the hiring and pay of their auditors in the hands of an independent audit board committee. There has been concern that management still has significant influence on the evaluation and final decisions. Phillip Lamoreaux, an accounting professor at Arizona State University, conducted a study of more than 2,000 auditor changes in publicly traded companies. He found that companies whose top executives had worked with a Big Four accounting firm were twice as likely to select that firm. Many executives make their way into corporate America through the largest accounting firms in the world. A chief accountant in the Securities and Exchange…arrow_forwardMost auditors believe that financial statements are "presented fairly" when the statements are in accordance with GAAP, and that it is also necessary to Select one: a. assure investors that net income reported this year will be exceeded in the future b. review the statements using the accounting principles promulgated by the SEC c. examine the substance of transactions and balances for possible misinformationarrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning