a.
Concept Introduction:
Decision Making−It is the process of making choice by identifying the decision, collecting relevant information and choosing possible alternatives.
The auditors were to be held responsible for fraud and gross negligence, though not for negligence.
To comment: About the auditors of publicly traded companies.
b.
Concept Introduction:
Decision Making−It is the process of making choice by identifying the decision, collecting relevant information and choosing possible alternatives.
The auditors were to be held responsible for fraud and gross negligence, though not for negligence.
To comment: About the auditors of privately traded companies.
c.
Concept Introduction:
Decision Making−It is the process of making choice by identifying the decision, collecting relevant information and choosing possible alternatives.
The auditors were to be held responsible for fraud and gross negligence, though not for negligence.
To comment: About the covered members under ‘Rule 101’.
d.
Concept Introduction:
Decision Making−It is the process of making choice by identifying the decision, collecting relevant information and choosing possible alternatives.
The auditors were to be held responsible for fraud and gross negligence, though not for negligence.
To comment: About the direct and indirect financial interest.
e.
Concept Introduction:
Decision Making−It is the process of making choice by identifying the decision, collecting relevant information and choosing possible alternatives.
The auditors were to be held responsible for fraud and gross negligence, though not for negligence.
To state: The services that an auditor is restricted to perform in a publicly traded company.
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Chapter 4 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
- Why do you think the SEC requires companies to disclose fees paid to independent accountingfirms for audit and consulting services? What must be disclosed?arrow_forwardExplain the auditor's role in ensuring that rules and regulations are followed. How does this obligation vary for laws and regulations that have a direct impact on financial statements vs those that do not?arrow_forwardExplain the auditor's role in ensuring that rules and regulations are being followed. For laws and regulations that have a direct impact on financial reporting, how is this obligation different from other laws and regulations that have no direct impact on financial reporting?arrow_forward
- Can you think of any reasons why the SEC relies on private sector bodies to set accounting standards, ratherthan undertaking the task itself?arrow_forward1)List and explain the General Standards. 2)What are the Auditor’s Liabilities under Common Law and Contract Law. 3) What are the Auditor’s Liabilities under Statutory Law (SEC Acts and Other Acts of Congress). Securities Act 1933: Securities & Exchange Act 1934: Foreign Corrupt Practices Act (1977): Private Securities Litigation Reform Act (1995/1998): Sarbanes-Oxley Act (2002):arrow_forwardWhich of the following parties is responsible for the fairness of the representations made in financial statements? * O Audit committee. Client's management. AICPA. OIndependent auditor. TOSHIBAarrow_forward
- Which of the following parties is responsible for the fairness of the representations made in financial statements? * O AICPA. Independent auditor. O Audit committee. O Client's management.arrow_forwardHow have provisions of the Sarbanes–Oxley Act limited a public company’s choice of auditors?arrow_forwardWhich 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_forward
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