Give typing answer with explanation and conclusion Referring CFA Standards of Professional Conduct I(A): Knowledge ofthe Law, which of the following is NOT correct:Select one:O a. Know their firm's policies and procedures for accessingcompliance guidanceO b. remain vigilant in maintaining general knowledge of the legalrequirements governing their investment activitiesO c. not rely on outside compliance consultants to assist them incomplying with securities laws that are applicable to theirprofessional activitiesO d. must dissociate from any violation of laws and regulationsOe. All are incorrect

The CFA Standards of Professional Conduct I(A): Knowledge of the Law emphasizes the importance of…

Answered: Referring CFA Standards of Professional…

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter2: Audits Of High-risk Accounts

Section2.11: Overstock.com, Inc.

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1. A "comfort letter" to an investment banking firm will normally not: Group of answer choices a. Express negative assurance. b. Be included with the registration statement for the securities. c. Include the CPA's opinion as to whether the audited financial statements comply in all material respects with applicable requirements of the related securities acts. c. Include a statement as to the auditors' independence.
Which of the following should a bank do if they wish to engage in both security rating and investment banking? Group of answer choices a. Restrict prepublication of analyst reports to research personnel only b. Base compensation for analysts on positive ratings of securities c. Place analysts in the supervisory organization under sales personnel d. All of the above
23. In performing risk assessment procedures for investments, an auditor may inquire of the client personnel which of the following questions? Group of answer choices Are the duties of authorization, custody, recording keeping and valuation of investment securities transactions segregated? Are investment securities acquisitions and disposals properly authorized by the board of directors? Is access to investment securities restricted to at least two authorized officials? All of the choices.
The primary responsibility of the board is to ensure that it develops a clear understanding of the bank’s business strategy and fundamental risks. The board also needs to ensure that: Group of answer choices C. Risks are verified through review of accounting and not economic practices. A. Risks are made transparent to stakeholders and managers. D. Both A & B B. Risks are made transparent legally through non-disclosure agreements.
In certain cases, multiple regulatory bodies aff ect a company’s fi nancial reporting requirements. For example, in almost all jurisdictions around the world, banking-specifi c regulatory bodies establish requirements related to risk-based capital measurement, minimum capital adequacy, provisions for doubtful loans, and minimum monetary reserves. An awareness of such regulations provides an analyst with the context to understand a bank’s business, including the objectives and scope of allowed activities. Insurance is another industry where specifi c regulations typically are in place. An analyst should be aware of such regulations to understand constraints on an insurance company. Th e following are examples of country-specifi c bank regulators. In Canada, the Offi ce of the Superintendent of Financial Institutions regulates and supervises all banks in Canada as well as some other federally incorporated or registered fi nancial institutions or intermediaries. In Germany, the German…
Dodson is preparing to meet with the controller of Charlemagne Co. to discuss the written representations the management of Charlemagne will provide as a part of an engagement to report on an examination of an investment portfolio to be distributed to Charlemagne's ownership. Charlemagne does not have any previously audited financial statements. Which section of the authoritative literature provides specific examples of matters that might appear in the representation letter that Dodson should consider discussing with the controller during this meeting? Enter response for Example: QC : 12. A34
(Assumptions, Principles, and Constraint) Presented below are a number of operational guidelines and practices that have developed over time. Select the assumption, principle or constraint that most appropriately justifies these procedures and practices. A.) All significant post-balance sheet events are reported B.) Intangibles are capitalized and amortized over periods benefitted C.) Price -level chances are not recognized in the accounting records D.) Brokerage firms use market value for purposes of valuation of all marketable securities E.) Financial information is presented so that reasonably prudent investors will not be misled F.) Lower-of-cost-or-net realizable value is used to value inventories G.) Each enterprise is kept as a unit distinct from its owner or owners H.) All important aspects of bon indentures are presented in financial statements I.) Revenue is recorded when the performance obligation is satisfied J.) a company charges its sales commission costs to expense K.)…
Requirement: Indicate where management assertions are being validated by the below substantive auditprocedures. Existence/Occurrence(E/O) Rights &obligations(R/O) Completeness(C) Valuation andallocation/Accuracy(V/A) Presentation& disclosure(P/D) a. Inspect securities on handand confirm securitiesheld by custodian.b. Trace serial numberindicated in the securityto the list of investmentsecurities maintained bythe client.c. The investment securitieslisted on the schedule ofinvestment transactionsof the client aremathematically accurateand agree with thegeneral ledger.d. Read minutes of meetingof board of directorsregarding investmentsused as collateral forborrowings.e. Recalculate gains andlosses on sale ofsecurities.f. Recalculate interest anddividend revenues.g. Inspect securitiessimultaneously with countof other liquid assets.h. Verify fair values ofsecurities with publishedprice quotations.i. Obtain an understandingon management’s processin classifying…
80 For which of the following matters should an auditor obtain written management representations? Group of answer choices Management’s compliance with contractual agreements that may affect the financial statements. Management’s knowledge of future plans that may affect the price of the entity’s stock. Management’s cost-benefit justifications for not correcting internal control weaknesses. Management’s acknowledgment of its responsibility for employee’s violations of laws.
In an attestation engagement, a CPA practitioner is engaged toa. Compile a company’s financial forecast based on management’s assumptions without expressing any form of assurance.b. Prepare a written report containing a conclusion about the reliability of a management assertion.c. Prepare a tax return using information the CPA has not audited or reviewed.d. Give expert testimony in court on particular facts in a corporate income tax controversy.
Following are typical questions that might appear on an internal control questionnaire for investments in marketable securities. Is custody of investment securities maintained by an employee who does not maintain the detailed records of the securities? Are securities registered in the company name? Are investment activities reviewed by an investment committee of the board of directors? Describe the manner in which each of the above procedures might be tested.
Substantive audit procedures Existence/Occurrence(E/O) Rights &obligations(R/O) Completeness(C) Valuation andallocation/Accuracy(V/A) Presentation& disclosure(P/D) a. Inspect securities on handand confirm securitiesheld by custodian. b. Trace serial numberindicated in the securityto the list of investmentsecurities maintained bythe client c. The investment securitieslisted on the schedule ofinvestment transactionsof the client aremathematically accurateand agree with thegeneral ledger. d. Read minutes of meetingof board of directorsregarding investmentsused as collateral forborrowings. e. Recalculate gains andlosses on sale ofsecurities. f. Recalculate interest anddividend revenues. g. Inspect securitiessimultaneously with countof other liquid assets. h. Verify fair values ofsecurities with publishedprice quotations. i. Obtain an understandingon management’s processin classifying…

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