3. On August 29, 2020, Mar Bonafe, CPA, was offered and accepted the engagement to audit the annual financial statements of ABC Corporation for the fiscal and calendar year ended Dec, 31, 2020. The audit began on Sept. 15, 2020, and ended on March 17, 2021. ABC Corporation is regulated by the SEC. Bonafe served as controller of ABC Corporation from Nov. 5, 2013 until Jan. 12, 2020 at which time he terminated his employment with ABC. Mar Bonafe owned a material amount of ABC Corporation ordinary or common shares from Nov. 5, 2013 until Aug, 15, in 2020, at which time he sold the shares. Is Mar Bonafe violation of the Code of Ethics due to
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- Jonathan Ewing is auditing the financial statements of California Company for the year ended December 31, 2020. In concluding the process of gathering sufficient appropriate evidence, Ewing has asked to meet with his supervisor on the audit (Daniel Ross) to discuss responsibility for events occurring after the date of the financial statements. Assume that on January 8, 2021, California Company agreed to acquire San Jose Inc. in a significant transaction. The date of Ewing's report was February 7, 2021, and California issued its financial statements (and Ewing's reports on its financial statements and internal control over financial reporting) on February 14, 2021. Required: How would Ewing proceed if he became aware of this subsequent event on the following dates? 1. January 10, 2021 2. February 10, 2021 3. February 20, 2021You are assigned to perform a review of minutes of meeting for the year end audit ending December 31, 2021. Which of the following agendas would least likely affect the total liabilities of the entity? Choices: The settlement of a pending litigation with another entity on January 5, 2022. The approval of the board of directors of the issuance of a 5-year term bond last September 2021. Property dividends declared on December 27, 2021. The payment of real property taxes for the year 2021 at the beginning of 2021.Ann Johnson has audited the financial report of Quick Ltd for the year ended 30 June 2020. Although Ann’s audit fieldwork was completed on 14 August 2020, her auditor’s report was signed on 20 August 2020 and sent to management that day. The management of Quick Ltd advised Ann that their annual report, which will be mailed to shareholders on 10 October 2020, will also include an unaudited financial report for the first quarter ended 30 September 2020. Under the circumstances, Ann is responsible for undertaking subsequent events audit procedures through to:Select one:a. 10 October 2020b. 20 August 2020c. 14 August 2020d. 30 September 2020
- You are assigned to perform a review of minutes of meeting for the year end audit ending December 31, 2021. Which of the following agendas would least likely affect the total liabilities of the entity? A. The payment of real property taxes for the year 2021 at the beginning of 2021. B. The approval of the board of directors of the issuance of a S-year term bond last September 2021. C. Property dividends declared on December 27, 2021 D. The settlement of a pending litigation with another entity on January 5, 2022.You are assigned to perform a review of minutes of meeting for the year end audit ending December 31, 2021. Which of the following agendas would least likely affect the total liabilities of the entity? Group of answer choices A. The payment of real property taxes for the year 2021 at the beginning of 2021. B. The approval of the board of directors of the issuance of a 5-year term bond last September 2021. C. The settlement of a pending litigation with another entity on January 5, 2022. D. Property dividends declared on December 27, 2021Ryan Smith, CPA is the controller of a privately held company. His corporations' fiscal year end is September 30, 2021. In July 2021 FASB issued new authoriative guidance. Ryan is unsure of when the company has to follow the new guidance that was recently issued by FASB. The transition guidance states the following: "For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2021. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023." What is the first fiscal year that the company will include the new guidance in the financial statements? Question 25 options: a) January 1, 2021-December 31, 2021 b) October 1, 2022-September 30, 2023 c) October 1, 2023 - September 30, 2023 d) October 1, 2024 - September 30, 2024
- 5. You are assigned to perform a review of minutes of meeting for the year end audit ending December 31, 2021. Which of the following agendas would least likely affect the total liabilities of the entity? Group of answer choices a. The payment of real property taxes for the year 2021 at the beginning of 2021. b. Property dividends declared on December 27, 2021. c. The approval of the board of directors of the issuance of a 5-year term bond last September 2021. d. The settlement of a pending litigation with another entity on January 5, 2022. 6. As the audit associate, you were asked by the senior associate to check the completeness of confirmation letters. Upon your review, there is a supplier that has not yet given their reply. What alternative audit procedure would most likely be performed by the audit associate, assuming the audit is at its wrap-up stage? Group of answer choices a. Perform analytical procedures b. Send another confirmation letter c. Vouch subsequent…Parkman Sporting Goods is preparing its annual report for its 2021 fiscal year. The company’s controller has asked for your help in determining how best to disclose information about the following items:1. A related-party transaction.2. Depreciation method.3. Allowance for uncollectible accounts.4. Composition of investments.5. Composition of long-term debt.6. Inventory costing method.7. Number of shares of common stock authorized, issued, and outstanding.8. Employee benefit plans.Required:Indicate whether the above items should be disclosed (A) in the summary of significant accounting policies note, (B) in a separate disclosure note, or (C) on the face of the balance sheet.You are the auditor and are planning the audit for the financial year ending 30 June 2019. In the audit of personnel expenses account, the amount presented on the financial statement is $12,000,000. Client’s profit after tax is $4,000,000. You determine that misstatements on the financial statement level below 7% of profit after tax will be considered immaterial. Calculate the overall materiality. Does this level of materiality apply to the personnel expenses account?
- AJ Kumar is completing the December 31, 2020, audit of Kiwi Company. As part of the final procedures, Kumar has requested representations from Kiwi’s management regarding their assertion as to the fairness of the financial statements and other important matters addressed by professional standards. Because Kiwi’s management is attending an analyst briefing in the upcoming week, Kumar receives these signed representations dated February 6, 2021. Kumar has a few remaining items to complete, does so, and dates the auditor’s report February 9, 2021. Describe the most appropriate course of action that the auditors should take.17-36 Roscoe & Jones, Ltd., a CPA firm in Silver Bell, Arizona, has completed the audit of the financial statements of Excelsior Corporation as of, and for, the year ended December 31, 20XI Findings related to the financial statements and the audit include Although Excelsior has been in existence for a number of years and been audited for the past seven years by Roscoe & Jones, it is presenting only current-year financial statements Roscoe was unable to perform normal accounts receivable confirmation procedures, but alternate procedures were used to satisfy Roscoe as to the validity of the receivables Excelsior Corporation is the defendant in litigation, the outcome of which is highly uncertain. If the case is settled in favor of the plaintiff, Excelsior will be required to pay a substantial amount of cash that might require the sale of certain assets. The litigation and the possible effects have been properly disclosed in Note 11 Roscoe wishes to include discussion of this…Ma1. John Anderson, CPA, is auditing the financial statements of American Turkey and Taco Cat, a privately owned company, for the year ended December 31, 2019. Anderson plans to complete fieldwork and sign the auditor's report about March 10, 2020. Anderson is concerned about events and transactions occurring after December 31, 2019, that may affect the 2019 financial statements. What general types of subsequent events require Anderson's consideration and evaluation? What auditing procedures should Anderson consider performing to gather evidence concerning subsequent events?