audit is scheduled to begin in one weck. With respcct to past duc audit fccs, Alma1. Alma, CPA, had not been paid yet her prior year's audit fee. The current year',audit is scheduled to begin in one weck. With respect to past duc audit fccs, Almshoulda. Perform the scheduled audit and allow the company to pay when cash flowdifficulties are alleviated.b. Perform the scheduled audit only after arranging a definite payment scheduleand securing notes signed by the company.C. Inform management that the past due audit fees may be considered a loan onwhich interest must be computed for financial statement purposes.d. Inform management that the past-due audit fees are considered an impairmentof auditor's independence.2. Without the consent of the client. a CPA should not disclose confidentialinformation contained in working papers to aa, Court that has issued a valid subpoena.b. Disciplinary body created under state statute.c. Voluntary quality control review board.d. CPA firm that has purchased the CPA’s practice.

Answer- Option D Inform management that the past due audit fees are considered an impairment of the…

Answered: car's audit is scheduled to begin in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Which of the following must be done If a resolution has been passed to remove the auditor ? i. Notify the Regulatory Authorities ii. Auditors must deposit statement of circumstances at company's registered office within 21 days of ceasing to hold the office iii. Auditors must deposit statement of circumstances at company's registered office within 14 days of ceasing to hold the office iv. Statement of circumstances must be sent to regulatory authority. Only i, ii and iv Only i and ii Only i and iii Only i , iii and iv
As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different dients. 1 2. No. Prepare the journal entries for each of the situations above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation M I 1. Oriole Company is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired land by issuing 4,500 shares of its $20 par value common stock. The owners' asking price for the land was $134,000, and the fair value of the land was $118,000. 2 Sunland Company is a publicly held corporation whose common stock is traded on the securities markets. On June 1, it acquired land by issuing 19,000 shares of its $10 par value stock. At the time of the exchange, the land was advertised for sale at $271,000. The stock was selling at $11…
One of the clients of MMM Chartered Accountants operates a restaurant. From January of the current year, the business has consistently paid its suppliers late, well in excess of the suppliers' normal credit terms. This has resulted in some suppliers requesting cash on delivery from the business. The auditor has reviewed the correspondence between the business and its bank and finds that the business has been experiencing cash flow problems for two years. Explain whether (and, if so, how) the information provided impacts on the auditor's assessment of preliminary materiality
Assume that you will be unable to inspect the securities owned by the client on the balance sheet date. What changes should be made to audit procedures if the inspection is not performed until two weeks after the balance sheet date?
Smith CPAs have requested that an audit client add a note disclosure to the financial statements related to their ability to operate as a going concern. The client has refused to do so; citing differences in opinion on some key loans that they believe will be refinanced. What should the auditors do at this point? The auditors should request a meeting with the client's board of directors, and discuss the issue with them. The auditors should consider modifying the opinion for a material departure. The auditors should consider disclaiming an opinion on the financial statements to preserve the reputation of the firm. The auditors should consider issuing a scope limitation, on the basis that management is not willing to make the necessary amendment.
4) Consider each situation independently and describe the audit opinion that should be given and explain why.a) The client estimated its Provision for Bad Debts based on an average of actual bad debts over the past five years. The client has always used this accounting policy when estimating this provision. The auditor considered the amount to be a reasonable one. The client has also properly accounted for and disclosed it in the financial statements. b) The client (a large department store) used the Last In First Out (LIFO) method to determine the cost of its closing stock. The IFRS’s does not allow the use of LIFO in accounting for inventory. The client is not willing to change this accounting policy. c) In rare circumstances e.g. when the client is not a going concern, in order to give a true and fair view, management may prepare financial statements on a basis other than going concern basis. The client which is no longer a going concern has still prepared the financial statements…

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