
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Compare and contrast traditional auditors’ legal responsibilities
to clients and third-party users under common law. How has that law changed in recent years?
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- Concerning litigation, claims, and assessments, which of the following is an audit procedure that an auditor Concerning litigation, claims, most likely would perform ? Select one: a. Confirm directly with the client’s lawyer that all litigation, claims, and assessments have been recorded or disclosed in the financial statements. b. Discuss with management its policies and procedures adopted for evaluating and accounting for litigation, claims, and assessments. c. Request the client’s lawyer to evaluate whether the client’s pending litigation, claims, and assessments indicate a going concern problem. d. Examine the legal documents in the client’s lawyer’s possession concerning litigation, claims, and assessments to which the lawyer has devoted substantive attention.arrow_forwardHow would an auditor communicate known there are violations of the law and the auditor's responsibilities according to the law?arrow_forwardIn assessing whether to accept a client for an audit engagement, an auditor should consider the: Select one:a. Political consistency of the country. b. Auditor’s engagement risk.c. The social and cultural factors of society in which the business operates. d. None of the above.arrow_forward
- What does a third-party user of financial statements have to prove under common law in a suit against an auditor for the auditor's negligence? Explain each item with an examplearrow_forwardHow does the Single Audit Act work?What effect has this legislation had on governmental organisation auditing?What formats do auditors' reports and opinions take?arrow_forwardDo the auditors have to report on (a) the audited financial statements and (b) any other information that is required by law?arrow_forward
- Many companies request that their auditors provide them with other services, such as tax or consultancy, as well as the external audit. Discuss the arguments for and against auditors providing non-audit services.arrow_forwardImpact of Changing Rules. Many companies outsource their internal audit function to CPA firms.Required:a. What benefits might be gained from having a CPA firm provide its internal audit services?b. What benefits might be gained from having an in-house internal audit department?c. What concerns might arise from having a CPA firm provide its internal audit services?arrow_forwardHow does Federal Law impact the scope, methodologies, and reporting requirements for integrated, performance, and other audits conducted within the public sector, and what are the key challenges auditors face in ensuring compliance with legal mandates while maintaining audit quality and transparencyarrow_forward
- Using the concept of justice, evaluate how an auditor would assess the equality of interests in the financial reporting process.arrow_forwardHow do the major provisionsof the Sarbanes–Oxley Actaffect a public company’s auditprocedures?arrow_forwardIs a member of an audit team required to disclose to a client that a commission will be received at the time the referral is being made under the “Commissions and Referral Fees Rule”? Yes or Noarrow_forward
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