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Select the appropriate provisions of the Sarbanes-Oxley Act (SOX) for each of the following descriptions. Descriptions Major Provisions of the Sarbanes-Oxley Act a. Executives must personally certify the company's financial statements. b. Audit firm cannot provide a variety of other services to its client, such as investment advising. c. PCAOB establishes standards related to the preparation of audited financial reports. d. Lead audit partners are required to change every five years. e. Management must document the effectiveness of procedures that could affect financial reporting.

Which of the following is true with respect to PCAOB inspections of accounting firms?a. All firms performing audits of public companies are required to have annual inspectionsconducted by the PCAOB.b. PCAOB inspections review a sample of audits conducted by firms as well as the firm’ssystems of quality control.c. All results of PCAOB inspections are made available to the public following the inspection.d. Firms performing audits of 100 or fewer public entities may elect to have a peer reviewconducted through the AICPA in lieu of a PCAOB inspection.

All companies are required to disclose in their annual reports the amounts paid to their auditors for both the financial report audit and any other services performed for the company.   Required Obtain a copy of a recent annual report (most companies make their annual reports available on the company's website) and find the disclosures explaining the amounts paid to auditors. How much was the auditor paid for the audit, non-assurance, or other services?

You have recently been appointed as auditor to Johnson Plc; a company whose shares are traded on the Stock Exchange. The Directors of Johnson Plc have recommended that you perform the following services . (i) The statutory audit of the annual financial statements. (ii) Taxation services, and (iii) Consistency services in respect of the implementation of a new information technology system Your firm has not acted for Johnson Plc before but does act as auditor for one of the major competitors. Required. (a) Identify and explain the professional and ethical issues that should have been identified by your firm in relation to the provision of the services outlined above, and describe the safeguards that should be in place in order to address these issues. (Include citations to support work). (b) What are the fundamental principles of ethics? Briefly explain their meaning (Include citations to support work). (c) A client’s affairs should not be disclosed to third parties. However where a…

You have recently been appointed as auditor to Johnson Plc; a company whoseshares are traded on the Stock Exchange. The Directors of Johnson Plc haverecommended that you perform the following services .(i) The statutory audit of the annual financial statements.(ii) Taxation services, and(iii) Consistency services in respect of the implementation of a new informationtechnology systemYour firm has not acted for Johnson Plc before but does act as auditor for one of themajor competitors.Required.(a) Identify and explain the professional and ethical issues that should have beenidentified by your firm in relation to the provision of the services outlined above,and describe the safeguards that should be in place in order to address theseissues

You have recently been appointed as auditor to Johnson Plc; a company whoseshares are traded on the Stock Exchange. The Directors of Johnson Plc haverecommended that you perform the following services .(i) The statutory audit of the annual financial statements.(ii) Taxation services, and(iii) Consistency services in respect of the implementation of a new informationtechnology systemYour firm has not acted for Johnson Plc before but does act as auditor for one of themajor competitors.Required. (b) What are the fundamental principles of ethics? Briefly explain their meaning

Your client portfolio as an audit manager at CC & Co also includes TT Co which is a listed financial institution offering loans and credit facilities to both commercial and retail customers. You have received an email from the audit supervisor who is currently supervising interim testing on systems and controls in relation to the audit for the year ending 31 October 2018. The email gives the following details for your consideration: One of the audit team members, Jones, has provisionally agreed to take out a loan with Thomas Co to finance the purchase of a domestic residence. The loan will be secured on the property and the client’s business manager has promised Jones that he will ensure that she gets ‘the very best deal which the bank can offer.’ The payroll manager at TT Co has asked the audit supervisor if it would be possible for CC & Co to provide a member of staff on secondment to work in the payroll department. The payroll manager has struggled to recruit a new…

you have recently been appointed as auditor to Johnson Plc; a company whose shares are traded on the Stock Exchange. The Directors of Johnson Plc have recommended that you perform the following services . (i) The statutory audit of the annual financial statements. (ii) Taxation services, and (iii) Consistency services in respect of the implementation of a new information technology system Your firm has not acted for Johnson Plc before but does act as auditor for one of the major competitors. (a) Identify and explain the professional and ethical issues that should have been identified by your firm in relation to the provision of the services outlined above, and describe the safeguards that should be in place in order to address these issues. (including Citations/references) (b) What are the fundamental principles of ethics? Briefly explain their meaning (including Citations/references) (c) A client’s affairs should not be disclosed to third parties. However where a client has been…

Select any publicly traded company and obtain its most recent 10-K filing.Links to an external site. (within the last two years). Select a different company from your peers. Assume that you have been assigned as the auditor for this company. Choose one of the topics below to discuss: Identify the risks the company included in its filing. As the auditor, you need to be aware of these risks, as they could have misstatement implications for multiple financial statement accounts. What concerns should you have about the risk of material misstatement in the financial statements for the company you selected? Review Footnote Disclosures and discuss any pending litigation. What is the primary concern for auditors and shareholders regarding disclosure of pending litigation?  Discuss any related party transactions in the Footnote Disclosures. What is the primary concern for auditors and shareholders regarding the disclosure of related party transactions?

You are a new staff member of Monet & Associates, a mid-sized accounting firm and have been assigned to an engagement team that is conducting the financial report audit for Harrisons Ltd (Harrisons). The engagement team, under the guidance of the engagement partner, Vince Mater, is currently performing a preliminary risk assessment of the audit client. The following documents have been provided to you: Memo from audit partner, Vince Mater, dated 6th January 2020 which includes a summary of the initial audit procedures undertaken by the engagement partner for the 31 December 2019 audit. A relevant industry outlook report provided by the Australian Construction Industry Forum published on 7 November 2019.   REQUIRED: You have been asked to assess the inherent risk of the client and perform preliminary analytical procedures as part of the audit planning process in obtaining an understanding about the client’s business and indicate where there is an increased likelihood of…

SEC Independence and Nonaudit Services. Is independence impaired on these SEC filing audits according to SEC independence rules regarding nonaudit services?a. CPA Dakota Tidrick is a staff assistant II auditor on the Section Co. audit. Upon the audit completion date in January, Tidrick drafted the balance sheet, income statement, comprehensive income statement, statement of cash flows, and notes for review by the engagement partner before the auditors’ report was finalized.b. CPA Mel Carnes is a manager in the firm’s consulting division. He spent 100 hours with the Section Co. audit client on an accounts payable information system study, which involved selecting the preferred software and supervising Section Co.’s employees in startup operations. c. CPA Nicky Webber, working in the public accounting firm’s asset valuation consulting division located in Chicago, prepared for Section Co. an appraisal of the fair value of assets purchased in Section’s merger with the Group Co. These…

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You are now nearing the completion of the audit of Rooney Co Ltd for the year ended 31 December 2020. Draft financial statements have been produced. You have been given the responsibility of performing of a review of the audit files before they are passed to audit manager and the audit partner for their review. You have been asked to concentrate on the sources of the evidence obtained. While reviewing the working papers you noted that your junior officers have recorded the following sources of evidence:(i) Oral representation by management in respect of the completeness of sales where the majority of transactions are conducted on a cash basis.(ii) Year-end suppliers' statements (iii) Physical inspection of a non-current asset by an auditor One of your responsibilities is to act as a mentor to junior officers into the department Required : ISA 500 Paragraph 4 states that ‘’The objective of the auditor is to design and perform audit procedures in such a way as to enable the auditor to…

Which of the following is not correct with regard to the Public Company Accounting Oversight Board?a. The board can expel a registered auditing firm without SEC approval.b. All registered auditing firms must be inspected at least every three years.c. The board members must be appointed by Congress.d. The board has the authority to set auditing standards rather than utilize the work of the Auditing Standards Board.

CASE STUDY: HARRISONS LTD You are a new staff member of Monet & Associates, a mid-sized accounting firm and have been assigned to an engagement team that is conducting the financial report audit for Harrisons Ltd (Harrisons). The engagement team, under the guidance of the engagement partner, Vince Mater, is currently performing a preliminary risk assessment of the audit client. The following documents have been provided to you: Memo from audit partner, Vince Mater, dated 6thJanuary 2020 which includes a summary of the initial audit procedures undertaken by the engagement partner for the 31 December 2019 audit. A relevant industry outlook report provided by the Australian Construction Industry Forum published on 7 November 2019.   REQUIRED: You have been asked to assess the inherent risk of the client and perform preliminary analytical procedures as part of the audit planning process in obtaining an understanding about the client’s business and indicate where there is an increased…

As a general rule, the registered company auditor is appointed by the shareholders at the annual general meeting. A registered company auditor must be:  Select one: a. Free from material obligations.   b. A graduate of a prescribed university or other prescribed institution in Australia. c. A member of the Financial reporting council.  d. A member of the Auditing & Assurance standards board.

An independent CPA who conducts audits of entities that receive federal financial assistance has what responsibility related to a peer review? O Does not have to have one unless he/she belongs to the AICPA Private Companies Practice Section. O Must have one every year. O Must have one at least every two years. Must have one at least every three years. 45 O

In the normal course of performing their responsibilities,auditors often conduct audits or reviews of the following:1. Federal income tax returns of an officer of the corporation to determine whether heor she has included all taxable income in his or her return.2. Financial statements for use by stockholders when there is an internal audit staff.3. A bond indenture agreement to make sure a company is following all requirementsof the contract.4. Internal controls at a casino to ensure the casino is in compliance with federal andstate regulations.5. Computer operations of a corporation to evaluate whether the computer center isbeing operated as efficiently as possible.6. Annual statements for the use of management.7. Operations of the IRS to determine whether the internal revenue agents are usingtheir time efficiently in conducting audits.8. Statements for bankers and other creditors when the client is too small to have anaudit staff.9. Financial statements of a branch of the federal…

Review the following independent auditors’ report: To the Board of Directors and Shareholders Company XYZ"We have audited the accompanying balance sheets of XYZ Company as of December 31, 2020, 2019 and 2018, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the Caribbean. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the…