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- In the audit of the James Mobley Company, you are concernedabout the possibility of contingent liabilities resulting from a patent dispute. Discuss theprocedures you could use for an extensive investigation in this area.In the conduct of audits of financial statements, it would be a seriousbreach of responsibility if the auditor did not thoroughly understand accounting.However, many competent accountants do not have an understanding of the auditingprocess. What causes this difference?For how long does the Sarbanes–Oxley Act require auditors ofpublic companies to retain audit documentation?
- The Sarbanes-Oxley Act includes additional communication requirements for auditors of public companies. true or false?The AICPA can bar or suspend from practice any accountant deemed to have engaged in "unethical or improper professional conduct." Select one: True FalseDiscuss the auditor’s responsibility to communicate fraud to the audit committee. When is the auditor required to communicate possible fraud to parties other than the audit committee and management?
- Explain the circumstances under which an auditor should performaudit tests primarily designed to uncover fraud in the payroll and personnel cycle. Listthree audit procedures that are primarily for the detection of fraud and state the type offraud the procedure is meant to uncover.During an audit of a publicly held company, the auditor should obtain written confirmation regarding debenture transactions from the(1) debenture holders. (3) internal auditors.(2) client’s attorney. (4) trustee.Which of these relationships is false? a. Current Asstes+NON-Current Assests=Liabilites+Equity b. Assets-Liabilities=Equity c. Assets-Equity=Non-Current Liabilties
- Provide two examples of when an auditor might set a lower levelof performance materiality for a particular class of transactions, account balance, ordisclosureWhat should auditors do if during a review of financial statementsthey discover that applicable accounting standards are not being followed?How should CPA's evaluate risks to integrity and objectivity when considering providing gifts to audit clients and/or client management or accepting risks from them?