Indicate the alternative that best completes the following sentence: Upon obtaining factual documentation of unethical business conduct by the vice president, to whom the chief audit executive (CAE) reports, the CAE should do the following: Oa. Report the facts to the chief executive officer and the audit committee. Ob. Conduct an investigation to determine the extent of the vice president's involvement in the unethical acts. O c. Schedule an audit of the business function involved. d. Confront the vice president with the facts before proceeding with the investigation.
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- Auditors must consider the possibility of fraud by employees or management on every audit engagement. They must also consider the possibility that the client has not complied with laws. (a) Distinguish between employee and management fraud. (b) Describe the auditors' responsibility for the detection of fraud in an audit. (c) Describe the auditors' responsibility regarding noncompliance with laws by a client. Essay Toolbar navigation BIUS 등등 EM EV ADAssume that a CPA serves as an audit client’s business consultant and performs each of the following services for the client. Identify the threats to independence. Do you believe any safeguards can be employed to reduce the threat to an acceptable level? Explain.a. Advising on how to structure its business transactions to obtain specific accounting treatment under GAAP.b.Advising and directing the client in the accounting treatment that the client employed for numerous complex accounting, apart from its audit of the client’s financial statements.c. Selecting the audit client’s most senior accounting personnel by directly interviewing applicants for those positions.11)An auditor’s engagement letter most likely will include A.A request for permission to contact the client’s lawyer for assistance in identifying litigation, claims, and assessments. B.A reminder that management is responsible for illegal acts committed by employees. C.The auditor’s preliminary assessment of the risk factors relating to misstatements arising from fraudulent financial reporting. D.Management’s acknowledgment of its responsibility for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement. 12)Early appointment of the independent auditor will enableA. A more thorough examination to be performed. B.A proper study and evaluation of internal control to be performed. C.Sufficient competent evidential matter to be obtained. D.A more efficient examination to be planned. 13)An auditor who accepts an audit engagement and does not possess the industryexpertise of the business entity,…
- When auditors become aware of noncompliance with a law or regulation committed byclient personnel, the primary reason that the auditors should obtain a better understanding ofthe nature of the act is toa. Recommend remedial actions to the audit committee.b. Evaluate the effect of the noncompliance on the financial statements.c. Determine whether to contact law enforcement officials.d. Determine whether other similar acts could have occurred.While performing an audit of a public company, the auditors discovered material illegal acts and resigned due to the client's refusal to disclose them. The auditor's reason for resignation should be disclosed through: CPA Direct Communication with Shareholders and/or The Process of FilingAuditors must consider the possibility of fraud by employees or management on every audit engagement. They must also consider the possibility that the client has not complied with laws. (a) Distinguish between employee and management fraud. (b) Describe the auditors' responsibility for the detection of fraud in an audit. (c) Describe the auditors' responsibility regarding noncompliance with laws by a client.
- Which of the following statements would most likely appear in an auditor's engagement letter? a. Fees for our services are based on our regular per diem rates, plus travel and other out-of-pocket expenses. b. The auditor's preliminary assessment of the risk factors relating to misstatements arising from fraudulent financial reporting. c. A reminder that management is responsible for illegal acts committed by employees. d. After performing our preliminary analytical procedures, we will discuss with you the other procedures we consider necessary to complete the engagement. e. Required evidence is needed to issue a qualified opinion.What are the concepts of legal responsibility applicable to the accountant in his audit functions and other related services? and mention five (5) recommendations so that the auditor can prevent or protect himself from his legal responsibility.The auditor is required to prepare audit documentation sufficient to enable an experienced auditor, having no previous connection with the audit, to understand the _________________ in reaching conclusions on significant matters arising during the audit. Select one: a. Confirmation letters b. The interviews conducted with employees and management c. The total evidence gathered d. Significant professional judgements made
- Question 19 If an auditor believes that a misstatement might be intentional and the effect on the financial statements could be material the auditor should do which of the following? Resign from the engagement Discuss with the audit committee what should be done to prevent possible future future misstatements. Perform additional procedures to obtain additional evidence to determine whether fraud has occurred or is likely to have occurred and whether there is a material impact on the financial statements. Contact local authorities.A CPA audits the financial statements of a client. The CPA has been asked to perform bookkeepingfunctions for the client. Under the AICPA Code of Professional Conduct, which of the followingactivities would impair the CPA's independence? a. The CPA records transactions in accordance with classifications determined by management. b. The CPA prepares financial statements from a trial balance provided by management. c. The CPA posts adjusting journal entries prepared by managementto the trial balance. d.The CPA authorizes client transactions and reports them to management.Mr. Salim has appointed as an auditor of Shinas Mart LLC. At the end of the audit, he maintains audit documentation. Identify the purpose of the retention of the audit document, O a. Audit documentation is a part of client policy O b. Management is required to keep them in a safe custody to ensure confidentiality O . Audit documentation is a part of accounting record O d. Audit documentation is the property of the auditor