Chapter 4, Problem 58RSCQ

a.

To determine

Concept Introduction:

Decision Making−It is the process of making choice by identifying the decision, collecting relevant information and choosing possible alternatives.

The auditors were to be held responsible for fraud and gross negligence, though not for negligence.

To comment: About the auditors of publicly traded companies.

b.

To determine

Concept Introduction:

Decision Making−It is the process of making choice by identifying the decision, collecting relevant information and choosing possible alternatives.

The auditors were to be held responsible for fraud and gross negligence, though not for negligence.

To comment: About the auditors of privately traded companies.

c.

To determine

Concept Introduction:

Decision Making−It is the process of making choice by identifying the decision, collecting relevant information and choosing possible alternatives.

The auditors were to be held responsible for fraud and gross negligence, though not for negligence.

To comment: About the covered members under ‘Rule 101’.

d.

To determine

Concept Introduction:

Decision Making−It is the process of making choice by identifying the decision, collecting relevant information and choosing possible alternatives.

The auditors were to be held responsible for fraud and gross negligence, though not for negligence.

To comment: About the direct and indirect financial interest.

e.

To determine

Concept Introduction:

Decision Making−It is the process of making choice by identifying the decision, collecting relevant information and choosing possible alternatives.

The auditors were to be held responsible for fraud and gross negligence, though not for negligence.

To state: The services that an auditor is restricted to perform in a publicly traded company.