Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
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Question
Chapter 2, Problem 20CYBK
To determine
Introduction:Public Company Accounting Oversight Board (PCAOB) lays down the auditing and accounting standards which are to be followed by the public companies. It is a non-profit organization with an aim to safeguard the interests of various stakeholders; especially investors.
To identify:The statement that detersand detects fraud in financial reporting.
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Students have asked these similar questions
For each requirement, state how it is intended to help to address the risk of fraud in publicly traded organizations.
a. Boards must have an audit committee with a minimum of three independent directors.
b. The audit committee must have a written charter that addresses the committee's purpose and responsibilities, and the committee must produce an audit committee report; there must also be an annual performance evaluation of the committee.
7) Compare and contrast between external
audit and internal audit in the public sector.
8)The scope of public sector audit extends
beyond that of private sector audit in a
number of ways'. Discuss this statement.
9)Find the latest available Audit Report
published on the website of the National
Audit Department. Identify one issue raised
by the Auditor General. Discuss this issue in
class. You can use either Audit Report for
Federal Government or any of the State
governments.
1o) Identify international organisations related
to audit in the public sector and briefly
describe their functions
Which of the following groups is responsible for developing auditing standards for public firms in the U.S.? A. American Institution of Certified Public Accountant (AICPA)B. Public Company Accounting Oversight Board (PCAOB)C. Organizations for Economic Cooperation and Development (OECD)D. Center for Audit Quality (CAQ)
Chapter 2 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
Ch. 2 - The Great Salad Oil Swindle of 1963 is an asset...Ch. 2 - Prob. 2CYBKCh. 2 - Prob. 3CYBKCh. 2 - Prob. 4CYBKCh. 2 - The three elements of the fraud triangle include...Ch. 2 - Prob. 6CYBKCh. 2 - Prob. 7CYBKCh. 2 - Prob. 8CYBKCh. 2 - Prob. 9CYBKCh. 2 - Prob. 10CYBK
Ch. 2 - Prob. 11CYBKCh. 2 - Prob. 12CYBKCh. 2 - Prob. 13CYBKCh. 2 - Prob. 14CYBKCh. 2 - Prob. 15CYBKCh. 2 - Prob. 16CYBKCh. 2 - Prob. 17CYBKCh. 2 - Prob. 18CYBKCh. 2 - Prob. 19CYBKCh. 2 - Prob. 20CYBKCh. 2 - Prob. 21CYBKCh. 2 - Prob. 22CYBKCh. 2 - Prob. 23CYBKCh. 2 - Prob. 24CYBKCh. 2 - Prob. 1RQSCCh. 2 - Prob. 2RQSCCh. 2 - Prob. 3RQSCCh. 2 - Refer to Exhibit 2.1 a. What is a Ponzi scheme? b....Ch. 2 - Prob. 5RQSCCh. 2 - Prob. 6RQSCCh. 2 - Prob. 7RQSCCh. 2 - Prob. 8RQSCCh. 2 - Prob. 9RQSCCh. 2 - Prob. 10RQSCCh. 2 - Prob. 11RQSCCh. 2 - Prob. 12RQSCCh. 2 - Prob. 13RQSCCh. 2 - Prob. 14RQSCCh. 2 - Many consider the Enron fraud to be one of the...Ch. 2 - Prob. 16RQSCCh. 2 - Prob. 17RQSCCh. 2 - Prob. 18RQSCCh. 2 - Prob. 19RQSCCh. 2 - Prob. 20RQSCCh. 2 - Prob. 21RQSCCh. 2 - Prob. 22RQSCCh. 2 - Prob. 23RQSCCh. 2 - Prob. 24RQSCCh. 2 - Prob. 25RQSCCh. 2 - Prob. 26FFCh. 2 - Prob. 27FFCh. 2 - Prob. 28FF
Knowledge Booster
Similar questions
- Which of the following is the federal, independent agency that provides oversight of public companies to maintain fair representation of company financial activities for investors to make informed decisions? A. IRS (Internal Revenue Service) B. SEC (Securities and Exchange Commission) C. FASB (Financial Accounting Standards Board) D. FDIC (Federal Deposit Insurance Corporation)arrow_forwardSection 301 of the Sarbanes-Oaxley requires that public companies have an audit committee. Independent auditors are increasingly involved with audit committees. Required: a. Describe what an audit committee is. b. Identify the reasons why audit committees have been formed and are currently in operation. c. Describe the functions of an audit committee.arrow_forwardDistinguish between auditing standards and generally accepted accounting principles, and give two examples of each. Auditing standards: A. represent pronouncements by any of the organizations responsible for setting auditing standards. In the U.S. these standards are set by the PCAOB for public companies and broker dealers, and by the Auditing Standards Board of the AICPA for other entities. B. are ten general guidelines to aid auditors in fulfilling their professional responsibilities and maintain professional skepticism and exercise professional judgment. C. represent the combination of the six principles and four of the Statements on Auditing Standards (SASS) that are codified in the AU-C sections. D. outline specific rules for accounting for transactions occurring in a business enterprise for all private companies in the United States.arrow_forward
- Which of the following is not a purpose of the Center for Audit Quality which is affiliated with the AICPA? a. to serve investors b. to serve the International Accounting Standards Board (IASB) c. to serve the capital markets d. to serve public company auditorsarrow_forwardWhich of the following agencies issues independence rules for the auditors of public companies?a. Financial Accounting Standards Board (FASB).b. Government Accountability Office (GAO).c. Public Company Accounting Oversight Board (PCAOB)d. AICPA Accounting and Review Services Committee (ARSC)arrow_forward13. When auditing an entity's financial statements in accordance with Government Auditing Standards (the "Yellow Book"), an auditor is required to report on: I. Recommendations for actions to improve operations. II. The scope of the auditor's tests of compliance with laws and regulations. Group of answer choices I only. II only. Both I and II. Neither I nor II.arrow_forward
- Which of the following is a requirement of the Sarbanes–Oxley Act of 2002?a. Registration of all auditing firms with the Public Company Accounting Oversight Board.b. Annual inspection of all auditing firms registered with the Public Company Accounting Oversight Board.c. A monetary fee assessed on organizations issuing securities.d. Overall assessment of the work of the SEC each year.arrow_forward(a) An International Code of Ethics for professional Accountant was developed by International Federation of Accountants (IFAC) with the sole aim of promoting consistency and a foundation for countries to develop their own code. Explain the five fundamental principles which members must comply with as set out by the ACCA's Code of Ethics and Conduct? (b) Critically evaluate the influence of Internal audit function on good corporate governance in a commercial environment. (a) Discuss the importance and extent to which analytical review can be relied on in supporting an audit opinion.arrow_forwardA CPA has been asked to audit the financial statements of a publicly held company for the first time. All preliminary verbal discussions and inquiries among the CPA, the company, the predecessor auditor, and all other necessary parties have been completed. The CPA is now preparing an engagement letter.. Required: a. List the items that should be included in the typical engagement letter in these circumstances. b. Describe the benefits derived from preparing an engagement letter. (AICPA, adapted) 4 2arrow_forward
- If a nonissuer wants an accountant to perform an examination of its internal controls, the accountant should follow:a. PCAOB AS 2201, “An Audit of Internal Control over Financial Reporting That Is Integrated with an Audit of Financial Statements.”b. AICPA AT 501, “An Examination of an Entity’s Internal Control over Financial Reporting That Is Integrated with an Audit of Its Financial Statements.”c. AICPA AU-C 315, “Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement.”d. FASB Concepts Statement No. 1, “Objectives of Financial Reporting by Business Enterprises.”arrow_forwardWhich of the following statements is true of the Sarbanes−Oxley Act? A. All private and foreign companies must issue an internal control report evaluated by an outside auditor. B. Accounting firms are allowed to provide both auditing services and a full range of consulting services to their public company clients. C. Those who commit securities fraud must be sentenced to 10 years in prison. D. The Public Company Accounting Oversight Board oversees the work of auditors of public companies.arrow_forwardWhich of the following is not true about the major differences in the scope of audit responsibilities for CPAS, GAO auditors, IRS agents, and internal auditors? CPAS perform audits of financial statements of private and public companies (A) prepared in accordance with U.S. or international auditing standards. GAO auditors perform compliance or operational audits in order to assure the B government of the expenditure of public funds in accordance with its directives and the law. IRS agents perform compliance audits to enforce the federal tax laws as defined by the government, interpreted by the courts, and regulated by the IRS. Internal auditors perform compliance or operational audits in order to assure management or the board of directors that controls and policies are properly and consistently developed, applied, and evaluated.arrow_forward
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