a.
Introduction: Auditing means the inspection of financial accounts of the company to determine if the records are accurate as per the rules and regulations of accounting or not. There are two types of auditors, i.e., internal auditors and external auditors, that carry out the
To Explain: Contingent fee.
b.
Introduction: Auditing means the inspection of financial accounts of the company to determine if the records are accurate as per the rules and regulations of accounting or not. There are two types of auditors, i.e., internal auditors and external auditors, that carry out the auditing process.
To state: The reason why contingent fees is not acceptable by the external auditors.
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Auditing: A Risk Based-Approach to Conducting a Quality Audit
- What is the most important quality for accounting information as identified in the conceptual framework? Explain why it is the most important. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardCPAs can advertise the fees only for their nonattest services. True or False?arrow_forwardAs you discuss the accounting conventions - Conservatism, Materiality, and Consistency - please detail how these widely accepted conventions modify the application of these principles in certain circumstances.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_forwardWhat are accounting errors and how they are reported. What are the disclosure requirements for correction of errors. Please see FASB codification to discuss the disclosure requirements.arrow_forwardWhich of the following best describes the effect of a contingent fee arrangement on the auditor's independence. A. The contingent fee arrangement does not impair independence if it is consistent with the registered public accountingfirm's quality control policies. B. The contingency fee arrangement impairs independence. C. The contingent fee arrangement does not impair independence unless more than half of the fee is subject to contingencies. D. The contingent fee arrangement impairs independence unless approved by the client's audit committee.arrow_forward
- BARTLEBY should not be copied. Explain simply what accounting is.arrow_forwardSomething is deemed to be 'material' if its omission, non-disclosure or misstatement is likely to affect economic decisions or other evaluations made by users entitled to rely on the financial statements. Select one alternative: True Falsearrow_forwarda. Why do you think it is so difficult to find an actual report?b. If you found an auditor’s report, were any deficiencies noted? If so, what were they?c. Why would a service organization publicize the results of its auditor’s report?arrow_forward
- How does criminology differ from the study of accounting or auditing?arrow_forwardListed below are selected Rules of Conduct and ethical problems. Match the rule with the problem to which it applies. (One Rule of Conduct may apply to more than one ethical problem.) Rules A. Independence B. Integrity and objectivity C. General standards D. Compliance with standards E. Accounting principles F. Contingent fees G. Acts discreditable H. Advertising and other forms of solicitation I. Commissions and referral fees J. Form or practice and name Rules An audit client owes the CPA past-due audit fees. The auditors fail to qualify their opinion on financial statements that do not properly apply FASB standards. A CPA who is the controller for a company knowingly issues misleading financial statements. A CPA performs tax services that the CPA is not competent to perform. A sole practitioner practices in a partnership name. A member violates rules issued by the Accounting and Review Services Committee. A CPA robs a service station. A CPA accepts a percentage of the client's loan…arrow_forwardAccounting & Finance - Auditing Question 5: Discuss the audit expectation gap. Your answer should include the following: the main causes of the expectation gap; its main components; and procedures that can be taken to reduce the expectation gap.arrow_forward
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