Connect Access Card for Principles of Auditing & Other Assurance Services
21st Edition
ISBN: 9781260299366
Author: Ray Whittington, Kurt Pany
Publisher: McGraw-Hill Education
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Question
Chapter 3, Problem 10RQ
To determine
Determine whether Ms. K would violate the public accounting profession’s requirements or not.
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Students have asked these similar questions
Sarah O’Hann enjoyed taking her first auditing course as part of her undergraduate accounting program. While at home during her semester break, she and her father discussed the class, and it was clear that he didn’t really understand the nature of the audit process as he asked the following questions.
What is the main objective of the audit of an entity’s financial statements?
Given the CPA firm is auditing financial statements, why would they need to understand anything about the client’s business?
What does the auditor do in an audit other than verify the mathematical accuracy of the numbers in the financial statements?
The audit represents the CPA firm’s guarantee about the accuracy of the financial statements, right?
Isn’t the auditor’s primary responsibility to detect all kinds of fraud at the client?
The following scenarios may result in non-compliance with one or more of the principles in the code of ethics, by the auditor or accountants. John, a chartered accountant who is employed by a state-owned enterprise, appeared before a commission of enquiry into financial irregularities that occurred under his direction. John denied his involvement but there was proof made available which indicated he was lying. John acknowledged that he had lied and then went on to state that he was instructed to do so by his superiors. Discuss if the chartered accountants or registered auditors in each of the scenarios above, have failed to comply with any of the fundamental ethical principles in the code of conduct.
Oakley is the CFO for Parsons Project Management. They have been notified of an impending audit of all accounting records. What is Oakley's role in the audit?
A. They are required to be absent during the audit to avoid influencing the results.B. They must agree to serve on the audit staff for other companies.C. They must be available to answer questions and grant access to payroll records.D. They must prevent privacy breaches by disallowing access to payroll records.
Chapter 3 Solutions
Connect Access Card for Principles of Auditing & Other Assurance Services
Ch. 3 - What is meant by the term ethical dilemma?...Ch. 3 - What are the two major types of constraints on...Ch. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Bill Scott works as a manager in the Phoenix...Ch. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - Prob. 16RQCh. 3 - Prob. 17RQCh. 3 - Prob. 18RQCh. 3 - Prob. 19RQCh. 3 - Prob. 20RQCh. 3 - Prob. 21RQCh. 3 - Prob. 22RQCh. 3 - Prob. 23RQCh. 3 - Prob. 24RQCh. 3 - Prob. 25RQCh. 3 - Prob. 26RQCh. 3 - Prob. 27QRACh. 3 - Prob. 28QRACh. 3 - Prob. 29QRACh. 3 - Prob. 30QRACh. 3 - Prob. 31QRACh. 3 - Prob. 32QRACh. 3 - Ron Barber, CPA, is auditing the financial...Ch. 3 - Prob. 34AOQCh. 3 - Prob. 34BOQCh. 3 - Prob. 34COQCh. 3 - Prob. 34DOQCh. 3 - Prob. 34EOQCh. 3 - Prob. 34FOQCh. 3 - Prob. 34GOQCh. 3 - Prob. 34HOQCh. 3 - Prob. 34IOQCh. 3 - Prob. 34JOQCh. 3 - Prob. 34KOQCh. 3 - Prob. 34LOQCh. 3 - Prob. 35OQCh. 3 - Prob. 36OQCh. 3 - Prob. 37OQCh. 3 - Prob. 38OQCh. 3 - Prob. 39OQCh. 3 - Prob. 40OQCh. 3 - Prob. 41OQCh. 3 - Prob. 42OQCh. 3 - Gary Watson, a graduating business student at a...Ch. 3 - Prob. 44PCh. 3 - Prob. 45PCh. 3 - Prob. 46PCh. 3 - Prob. 47PCh. 3 - Prob. 48PCh. 3 - Prob. 49ITCCh. 3 - Prob. 50ITCCh. 3 - Prob. 51RDC
Knowledge Booster
Similar questions
- Read the following scenario about Strang Corporation and identify the substantive procedures that the CPA (Elaine Stanley) should perform to determine whether lapping exists. Do not discuss deficiencies in the system of internal control. During the year, Strang Corporation began to encounter cash flow difficulties, and a cursory review by management revealed receivable collection problems. Strang’s management engaged Elaine Stan ley, CPA, to perform a special investigation. Stanley studied the billing and collection cycle and noted the following: The accounting department employs one bookkeeper who receives and opens all incoming mail. This bookkeeper is also responsible for depositing receipts, filing daily remittance advices, recording receipts in the cash receipts journal, and posting receipts in the individual customer accounts and the general ledger accounts. There are no cash sales. The bookkeeper prepares and controls the mailing of monthly statements to customers. The concentration of functions and the receivable collection problems caused Stanley to suspect that a systematic theft of customers’ payments through a delayed posting of remittances (lapping of accounts receivable) is present.arrow_forwardFor each of the following situations involving relations between auditors and the companies they audit, indicate whether it violates IFAC’s Code of Ethics for Professional Accountants and the rationale for the applicable guideline. a) Paul Asante, CPA, discloses confidential information in a peer review of the firm’s quality control procedures. b) Frank Smith, CPA, is auditing a company in Ghana, which has offered to send him and his wife on a holiday in Hawaii for two weeks. c) Tabula Gonzales, CPA, says in an interview in the local paper that Emilio Rios, CPA, misleads his clients about the quality of his audit work. Additional information: Please add references or citations.arrow_forwardFor each of the following situations involving relations between auditors and the companies they audit, indicate whether it violates IFACs Code of Ethics for Professional Accountants and the rationale for the applicable guideline. a.Paul Asante, CPA, discloses confidential information in a peer review of the firms quality control procedures. b.Frank Smith, CPA, is auditing a company in Ghana, which has offered to send him and his wife on a holiday in Hawaii for two weeks. b.Tabula Gonzales, CPA, says in an interview in the local paper that Emilio Rios, CPA, misleads his clients about the quality of his audit work.arrow_forward
- General and Technical Rule Cases. Read the following cases. For each, state whether the action or situation shows a violation of the AICPA Code of Professional Conduct; if so, explain why and cite the relevant rule.a. CPA Jerry Cheese became the new auditor for Python Insurance Company. Cheese knew a great deal about insurance accounting but had never conducted an audit of an insurance company. Consequently, Cheese hired CPA Tate Gilliam, who had six years of experience with the State Department of Insurance Audit. Gilliam managed the audit, and Cheese was the partner in charge. b. CPA Mackenzie Palin practices public accounting and is a director of Comedy Company. Palin’s firm performs consulting and tax services for Comedy. Palin prepared unaudited financial statements on Comedy’s letterhead and submitted them to First National Bank in support of a loan application. Palin’s accounting firm received a fee for this service.c. CPA Ellery Idle audited the financial statements of Monty…arrow_forwardAccording to the standards of the profession, which of the following circumstances will prevent an auditor performing audit engagements from being independent? a.The auditor's brother is the Operations Manager of the firm's client being audited by a team of which the said auditor is not a part of. b.The auditor obtained an automobile loan from a bank which is a client of another auditing firm. c.The auditor's spouse is employed as the Director of finance department of the company the said auditor is currently auditing. d.The auditor's auditing firm is involved in litigation with a previous client relating to billing for consulting services for which the amount involved is insignificant to the firm and to the client company.arrow_forwardFor each of the following situations involving relations between auditors and the companies they audit, indicate whether it violates IFAC's Code of Ethics for professional accountants and the rationale for the application guideline. Asante, CPA, discloses confidential information in a peer review of the firms quality control procedures. Frank Smith, CPA, is auditing a company in Ghana, which has offered to send him and his wife on a holiday in Hawaii for two weeks. Tabula Gonzales, CPA, says in an interview in the local paper that Emilio Rios, CPA, misleads his clients about the quality of his audit work.arrow_forward
- For each of the following situations involving relations between auditors and the companies they audit, indicate whether it violates IFAC’s Code of Ethics for Professional Accountants and the rationale for the applicable guideline. Paul Asante, CPA, discloses confidential information in a peer review of the firm’s quality control procedures. Frank Smith, CPA, is auditing a company in Ghana, which has offered to send him and his wife on a holiday in Hawaii for two weeks. Tabula Gonzales, CPA, says in an interview in the local paper that Emilio Rios, CPA, misleads his clients about the quality of his audit work.arrow_forwardDuring the audit of the Merrill Manufacturing Company,Ralph Pyson, CPA, has become aware of four lawsuits against the client throughdiscussions with the client, reading corporate minutes, and reviewing correspondencefiles. How should Pyson determine the materiality of the lawsuits and the properdisclosure in the financial statements?arrow_forwardYour spouse has just accepted a new job as chief accounting officer at conpany ABC, which is an iesba restricted audit client you are a member of the audit engagement team what are independence inplicationsarrow_forward
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