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Which of the following are required by the Sarbanes Oxley Act? Check all that apply. O The company's annual report must contain the CEO's assessment of the company's internal controls O Audit firms must rotate off a client every 5 years OCFOS must consult with the audit committee before hiring an auditor O Companies must develop and enforce a code of ethics

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 a requirement of the Sarbanes–Oxley Act of 2002?a. Registration of all auditing firms with the Public Company Accounting Oversight Board.b. Annual inspection of all auditing firms registered with the Public Company Accounting Oversight Board.c. A monetary fee assessed on organizations issuing securities.d. Overall assessment of the work of the SEC each year.

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.

You are meeting with executives of Cooper Cosmetics Corporation toarrange your firm’s engagement to audit the corporation’s financial statements for the year ending December 31. One executive suggests the audit work be divided among three staff members. One person would examine asset accounts, a second would examine liability accounts, and the third would examine income and expense accounts to minimize audit time, avoid duplication of staff effort, and curtail interference with entity operations.Advertising is the corporation’s largest expense, and the advertising manager suggests that a staff member of your firm whose uncle owns the advertising agency that handles the corporation’s advertising be assigned to examine the Advertising Expense account because the staff member has a thorough knowledge of the complex contact between Cooper Cosmetics and the advertising agency. Required:a. To what extent should auditors follow the client’s suggestions for the conduct of an audit? Discuss.b.…

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…

The annual examination of Felton Company’s financial statements by its external public accounting firm (auditors) is nearing completion. The following conversation took place between the controller of Felton Company (Francie) and the audit manager from the public accounting firm (Sumana):Sumana: You know, Francie, we are about to wrap up our audit for this fiscal year. Yet, there is one item still to be resolved.Francie: What’s that?Sumana: Well, as you know, at the beginning of the year, Felton began a defined benefit pension plan. This plan promises your employees an annual payment when they retire, using a formula based on their salaries at retirement and their years of service. I believe that a pension expense should be recognized this year, equal to the amount of pension earned by your employees.Francie: Wait a minute. I think you have it all wrong. The company doesn’t have a pension expense until it actually pays the pension in cash when the employee retires. After all, some of…

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…

Dalston Limited was incorporated on 1 November 2018 as a limited liability company.   but commenced business on 1 January 2019. It carries out general merchandise business.  On 5 February 2020, your firm was appointed as the external auditors to audit the company’s accounts for the year ended 31 December 2019. The signed copy of the engagement letter has been received from the Managing Director. The audit team has gone to commence the audit assignment at the company.  The job schedules have been assigned by the Audit Manager to the audit team members based on the Audit Planning Memorandum. The accounting system and internal controls were reviewed, and the audit completed within the time frame of two weeks.   At the commencement of the audit the following accounting systems were recorded.   (a).  Income Recognition  Income is recognised by the client based on the amount in the sales invoices issued for the goods supplied. The amounts of the sales orders are recognised as income for all…

Dalston Limited was incorporated on 1 November 2018 as a limited liability company.   but commenced business on 1 January 2019. It carries out general merchandise business.  On 5 February 2020, your firm was appointed as the external auditors to audit the company’s accounts for the year ended 31 December 2019. The signed copy of the engagement letter has been received from the Managing Director. The audit team has gone to commence the audit assignment at the company.  The job schedules have been assigned by the Audit Manager to the audit team members based on the Audit Planning Memorandum. The accounting system and internal controls were reviewed, and the audit completed within the time frame of two weeks.   At the commencement of the audit the following accounting systems were recorded.   (a).  Income Recognition  Income is recognised by the client based on the amount in the sales invoices issued for the goods supplied. The amounts of the sales orders are recognised as income for all…

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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…

The 2021 financial statement audit of OMG company began when the trial balance was received from management. You were assigned to audit the accounts payable of the entity. The schedule of liabilities to vendor showed that the company has only five suppliers which account for 90% of the total accounts payable balance.  Thus, the audit team has decided to send confirmation letters to those vendors. Upon your further review, you have noted that the amounts provided in the schedule and the trial balance does not balance, but you have noted that the difference is below the materiality threshold. Considering the facts provided, which of the following statements is true? Choices Since the difference is below materiality, there is no need to change samples. Negative confirmation letters may be sent to the suppliers even if we did not rely on controls. The sampling technique used by the audit associate is invalid because it involves bias. There is a sampling risk associated with the audit…