EP AUDITING+ASSURANCE...-MYACCT.LAB
16th Edition
ISBN: 9780134148656
Author: ARENS
Publisher: PEARSON CO
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Question
Chapter 3, Problem 28DQP
a.
To determine
Explain the manner in users of the financial statements may get benefits from communications about the matters in an audit report.
b.
To determine
State the manner in which the communication of the given matters may not be beneficial to users of the financial statements.
c.
To determine
Identify the difficulties that the auditors may face in communicating about the given matters.
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The creation of the PCAOB by the Sarbanes–Oxley Act has affected both the standards-setting process and the periodic review of the quality ofan audit firm’s work.Required:a. Identify the responsibilities of the AICPA, PCAOB, and SEC in the auditing standards-setting process.b. Which standard(s) provide guidance for the audits of public entities? Which standard(s) provide guidance for the audits of nonpublic entities?c. What role do the AICPA and PCAOB play in the periodic review of the quality of audit firms’ work?
What are the auditor’s responsibilities to communicate information to the audit committee under PCAOB standards? If the auditor discovers that the audit committee routinely ignores such communications especially when they are critical of management’s use of GAAP in the financial statements, what step(s) might the auditor take at this point?
Which of the following statements is not true with respect to the responsibility for establishing auditing standards?
Multiple Choice
The PCAOB issues auditing standards for the audit of issuers, subject to SEC approval.
Standards issued by the Auditing Standards Board after 2003 apply to the audits of both issuers and nonissuers.
The Auditing Standards Board currently issues auditing standards for the audit of nonissuers.
Prior to the Sarbanes-Oxley Act, the Auditing Standards Board issued auditing standards for the audits of both issuers a
Chapter 3 Solutions
EP AUDITING+ASSURANCE...-MYACCT.LAB
Ch. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Distinguish between a report qualified due to a...Ch. 3 - Prob. 15RQCh. 3 - Prob. 16RQCh. 3 - Prob. 17RQCh. 3 - Prob. 18RQCh. 3 - Prob. 19RQCh. 3 - Prob. 20.1MCQCh. 3 - Prob. 20.2MCQCh. 3 - Prob. 20.3MCQCh. 3 - Prob. 21.1MCQCh. 3 - Prob. 21.2MCQCh. 3 - Prob. 21.3MCQCh. 3 - Prob. 22.1MCQCh. 3 - Prob. 22.2MCQCh. 3 - Prob. 22.3MCQCh. 3 - Prob. 23DQPCh. 3 - Prob. 24DQPCh. 3 - Prob. 25DQPCh. 3 - Prob. 26DQPCh. 3 - Prob. 27DQPCh. 3 - Prob. 28DQPCh. 3 - Prob. 29DQP
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Similar questions
- After the audit report release date, auditors determine that an important auditing procedure was omitted. Which of the following initial courses of action is most appropriate?a. Perform the omitted procedure or an alternative procedure.b. Notify the board of directors and regulatory agencies that are currently relying on auditor’s reports.c. Determine whether the omitted procedure is important in supporting the auditor’s opinion on the entity’s financial statements.d. Engage another public accounting firm to conduct a quality assurance review.arrow_forwardWhich of the following statements should not be included in the Basis for Opinion section of the new auditor's report? a.Statement that the auditor is independent of the entity in accordance with the relevant ethical requirements relating to the audit b.Statement that the auditor believes that the audit evidence they obtained is sufficient and appropriate to provide a basis for the auditor's opinion c.Statement that the audit was conducted in accordance with International Standards on Auditing d.Statement of the auditor's opinion on the financial statements of the entityarrow_forwardASA570.10 requires the auditor to particularly evaluate the going concern problems and the related risk as part of the audit strategy and processes. What are the implications and the consequences for the audit if it is concluded that the going concern assumption is inappropriate and, as a result, the entity being audited is highly unlikely to continue in business in the foreseeable future? In your response and in your own words, discuss six (6) typical indicators of going concern problems and state the considerations and the additional procedures which should be included as part of the audit program.arrow_forward
- Explain what is meant by this statement "Ordinarily, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognize the non-compliance." What is the relevance of Philippine Standard on Auditing 250 (Redrafted) in the conduct of audit?arrow_forwardAudit working papers are an integral part of an examination in accordance with international standards on auditing. These documents are very important and need to be well taken care of in the auditing process. Upon completing an audit process, the auditors should issue an opinion on the client’s financial statements. REQUIRED: Explain TWO (2) conditions for the issuance of unqualified opinion on the financial statements. Describe THREE (3) situations that require the auditor to modify their standard report and still issue an unqualified opinion. Explain the purpose of key audit matters in the auditor’s report and how it should be described.arrow_forwardIf the audit firm is performing an integrated audit for a public company. there is an expectation that the auditor will test controls in order to support an opinion on Internal Control over Financial Reporting (ICFR) the auditor should request the assistance of the prior auditor O the audit should be conducted in conjunction with the internal auditors O there is an expectation that the auditor will audit the financial statements only in order to support an opinion on ICFRarrow_forward
- The Sarbanes-Oxley Act achieved all of the following except Select one: a. Limits the non-audit services an independent auditor may provide to a registrant. b. Requires regular inspection of audit engagements. c. Established the PCAOB. d. Identifies the FASB as the official source of GAAP for SEC filings.arrow_forwardwhen auditor client dispute arise during an audit engagement, another accounting firm is sometimes retained by the client and or/the existing auditor to provide an objective report on the issue on the center of the dispute - as happened during Deloitte's 1997 audit of Livent. Discuss and accounting firms responsibilities when it is retained to issue such a report.arrow_forwardAICPA and PCAOB Responsibilities. The creation of the PCAOB by the Sarbanes–OxleyAct has affected both the standards-setting process and the periodic review of the quality ofan audit firm’s work.Required:a. Identify the responsibilities of the AICPA, PCAOB, and SEC in the auditing standardssetting process.b. Which standard(s) provide guidance for the audits of public entities? Which standard(s)provide guidance for the audits of nonpublic entities?c. What role do the AICPA and PCAOB play in the periodic review of the quality of auditfirms’ work?arrow_forward
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