False Difficulty

Auditor, an instructional novella written by James K. Loebbecke, tells the story of Jack Butler, a man from the San Francisco Bay area, who goes to college, majors in accounting, and goes to work for a large accounting firm referred to as “The Firm.” The story is loosely based upon the real world experiences of the author, and is written to give students a look into the world of public accounting that goes beyond a textbook. The Auditor not only gives students a chance to follow Jack Butler’s journey up the company ladder at The Firm, but also reiterates the relative importance of conventional lessons learned in school.

Know which of the following statements is not true regarding the characteristics of a general partnership?

0 A publicly held corporation is entitled to limited liability, but the public corporation is not.

The Securities Exchange Act of 1934 was passed by congress to strengthen the government’s control of the financial markets. It was preceded by the Securities Exchange Act of 1933 which was enacted during the Great Depression in hopes that the stock market crash of 1929 would not be repeated. The basic difference between the two acts was that the 1933 Act was to govern the original sales of securities by requiring that the issuers, the companies offering the securities, offer up sufficient information about themselves and the securities so that the potential buyers could make informed decisions. The 1934 Act was

2. Maclntyre, Ewan. "The Law of Torts 1." Introduction to Business Law. 2nd ed. Essex: Pearson Education, 2012. 258-304. Print.

The auditor must review disclosures for adequacy, and if the auditor concludes that information disclosures are not reasonably adequate, the auditor must state so in the auditor’s

The auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the FS whether due to error or fraud and to

The Securities Exchange Act of 1934 is primarily concerned is requiring companies to disclosure their material information to investors. Different from the 1933 Act, which consisted mainly on a onetime disclosure statute when an issuer sells its shares to investors, the Securities Exchange Act 1934 Act requires periodic disclosures by issuers that hold a publicly equity securities. The 1934 Act is to protect investors after the issuer becomes a public company. Issuers with publicly traded equity securities, “Must report annually to its shareholders and submit annual and quarterly reports to the SEC” (Mollar, Barnes, Langvardt, Prenkert, and McCrory, pg. 1206, 2016). Another difference between these two acts is that under the 1934 Act issuers must register classes of securities, and on the 1933 Act it requires only for the term of an issuance of

b. This represents the type of fraud that would be detected only if the auditor had suspicion to believe that such a fraud existed. Internal auditors might routinely perform tests such as those identified in part 3 and would then detect the fraud.

The aim of this report is to develop an audit plan using the 2007/2008 annual reports of the WesFarmers. This report will provide an understanding of the underlying concepts of an overall audit strategy. This strategy will bring forward the direction and scope of the WesfFarmers audit plan. This report will address five major points these are as follows:

c. That being said, it was auditors and accountants who discovered the illegal actions which were occouring in each of these respective scandals.

This case established that an auditor could be sued by a primary beneficiary for damages from negligence. A primary beneficiary is a party that has a direct benefit from the audit. Non-privity parties could also sue for gross negligence. This increased the auditor’s legal exposure to third parties. The SEC of 1934 reflected these changes and many others; one significant change was that auditor’s had a much higher litigation risk due to their new responsibility to third parties.

B) I think the auditors should have equal responsibility for detecting material misstatements due to error and fraud. It’s their job to make sure the financial statements are as accurate as possible. Although it may be hard to check all the information from a company it’s the responsibility of the auditor to sign off that everything is in check.

The second part is opportunity. The opportunity to commit fraud usually arises through weak internal controls.

3. What potential implications arise for the accounting firm if they issue an unqualified report without the going-concern explanatory paragraph?