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Accounting
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Nov 24, 2024
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To strengthen outside auditor independence with regard to publicly held companies, the Sarbanes-Oxley
Act requires that:
A. Employment of staff from companies' accounting firms be approved in advance by the audit comitees
B. companies change accounting firms for audit services at least every seven years
C. accounting firms supply audit work papers annually to the SEC for their clients
D. the lead audit partner and audit review partner be rotated every five years -
✔✔
D
A company's credit agreements or loan covenants may require:
A. minimum ratings for insurance carriers.
B. high deductible levels and risk retention in order to minimize premium payments.
C. outsourcing of the claims approval and payment process to an insurance company.
D. risk management staff to work directly with underwriters to reduce commission payments -
✔✔
A
A multinational company (MNC) that operates a shared service center charges its foreign subsidiaries a
management fee. This management fee may need to be:
A. manipulated to locate profits in low-tax countries.
B. paid through a third-party intermediary.
C. negotiated with the host government.
D. significantly taxed by the host government -
✔✔
C
A multinational company may use which of the following to locate profits in subsidiaries in low-tax
countries?
A. Dividends
B. Transfer pricing
C. Management fees
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Related Questions
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
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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.
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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.
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Required:a. To what extent should auditors follow the client’s suggestions for the conduct of an audit? Discuss.b.…
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Required
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(ii) Taxation services, and
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Required.
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(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)
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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?
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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…
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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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I need all parts.......
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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…
arrow_forward
It is 1 July 20X5. You are an audit manager in Welford & Co, a firm of Chartered Certified Accountants. Your role includes performing post-issuance audit quality reviews, and you have been asked to review the audit work performed on Rivers Co for the financial year ended 31 January 20X5. You have gathered the following information from your review of the audit file:
Audit team and feesRivers Co is a listed company operating in the construction industry. The company complies with corporate governance regulations and has an audit committee. Rivers Co has been an audit client of Welford & Co for eight years, and Bob Newbold has been the audit engagement partner during this time. Rivers Co’s auditor’s report was signed by Bob Newbold and issued last week. The report contained an unmodified opinion.
Welford & Co requires its staff to record each hour they spend working on each client in the firm’s time management system. From reviewing the time records relating to the audit of…
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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 ethicsarrow_forwardSelect 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.arrow_forwardWhich 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.arrow_forward
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- Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub

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