Auditing and Assurance Services (16th Edition)
Auditing and Assurance Services (16th Edition)
16th Edition
ISBN: 9780134065823
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Chapter 4, Problem 19.3MCQ
To determine

Identify the option that is not a provision of the Sarbanes-Oxley-Act of 2002.

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A tax return client was audited for a prior year return and assessed a tax deficiency because a material deduction was disallowed. Nevertheless, the client insists on taking the very same kind of deduction on this year’s return...    (a)  A CPA absolutely may not prepare or sign the client’s return for this year un-less it conforms to the audit result for the prior year.   (b)  A CPA may prepare and sign the client’s return for this year claiming a de-duction that previously was disallowed if the CPA determines as a matter of in-dependent professional judgment that the deduction is proper.   (c)  A CPA may prepare and sign the client’s return for this year claiming a de-duction that previously was disallowed if the CPA receives a formal tax opinion from a law firm or from an unaffiliated CPA affirming that it is more likely than not that the deduction would be sustained on its merits if litigated.
Choose 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.
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.
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