The audit team is preparing to conduct its 2020 audit for ABC Company LLC. However, the auditteam has not received its audit fees from ABC Company for its 2019 audit. The audit team mightbe tempted to issue a favorable report so that the company is able to secure a loan to settle thefees outstanding for their 2019 audit. Which threat may occur as a result of the financial or otherinterests of a professional accountant or of an immediate or close family member?O Self-interest threatsFamiliarity threatsO Advocacy threatsO Self-review threats

An audit is conducted with the objective that the financial statement that they audit provide a true…

he audit team is preparing to conduct its 2020 audit for ABC Company LLC. Howeve eam has not received its audit fees from ABC Company for its 2019 audit. The audit be tempted to issue a favorable report so that the company is able to secure a loan t ees outstanding for their 2019 audit. Which threat may occur as a result of the finan hterests of a professional accountant or of an immediate or close family member? O Self-interest threats O Familiarity threats O Advocacy threats

he audit team is preparing to conduct its 2020 audit for ABC Company LLC. Howeve eam has not received its audit fees from ABC Company for its 2019 audit. The audit be tempted to issue a favorable report so that the company is able to secure a loan t ees outstanding for their 2019 audit. Which threat may occur as a result of the finan hterests of a professional accountant or of an immediate or close family member? O Self-interest threats O Familiarity threats O Advocacy threats

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

s
The following independent situations raise questions about an auditor’s ethical conduct: An auditor accepts an engagement knowing that she does not have the specialist knowledge required. An auditor discloses confidential information about a client to a successor auditor. A public accountant agrees to be the committee chairperson for a local fundraising activity. 4. An auditor accepts a commission from an insurance company for recommending it to one of its audit clients Indicate in each of the above situation whether the effect on professional ethics is (i) a violation or (ii) not a violation, and explain the reason
Which assets depreciate?
Which of the following statements is/are correct? O a. The ban on simultaneously offering consulting and auditing services to economically relevant companies within the framework of the FISG results from the bad experiences that BaFin had with corresponding offers in the context of the Wirecard scandal. O b. Violations of the so-called "blacklist" lead to significant fines being paid by the auditing company. Oc. According to the Financial Market Integrity Strengthening Act, companies are obliged to set up an audit committee to monitor the quality of the audit. O d. The external rotation of auditing firms requires more frequent tendering processes for auditing services.
15. The auditors who find that the client has committed an illegal act would be most likely to withdraw from the engagement when the: Select one:a. Illegal act has received widespread publicityb. Auditors cannot reasonably estimate the effect of the illegal act on the financial statements.c. Illegal act has material financial statement implicationsd. Management fails to take appropriate corrective action
What factors should auditors consider in deciding whether to accept or continue the engagement with a particular client? What should firms do if they decide to withdraw from an engagement?
Question 1 For each of the following scenarios, indicate whether in your opinion it is a violation of the HKICPA Code of Ethics. Specifically, for each scenario, choose one of the following options: (1) not likely to be a violation; (2) likely to be aviolation; or (3)clearly a violation. For each scenario, clearly explain your reasoning. 1.→Tong and Tong CPAS recently completed the audit of the Michaels Corporation and- issued an unqualified opinion on the financial statements. Subsequent to the issuance of the financial statem ents and auditor'sreport, the Securities and Futures Commission: (SFC) initiated an investigation into possible illegal acts engaged in by Michaels Corporation, andhas requesteda copy of all the auditing documentation prepared by: Tong and Tong. Michaels Corporation has contacted Tong and Tong and threatenedto: take legal action against the audit firm if the auditors provide the auditing documentation to the SFC. Michaelsmaintains that the information is…
When creditors who relied on an entity’s audited financial statements suffer monetary lossesafter a customer (the auditors’ client) goes bankrupt, what must the plaintiff creditors in alawsuit for damages show in a court that follows the doctrine in Credit Alliance?a. The auditors knew and specifically acknowledged identification of the creditors.b. The auditors could reasonably foresee them as beneficiaries of the audit because entitiessuch as this client use financial statements to obtain credit from vendors.c. The plaintiffs were foreseen users of the audited financial statements because they werevendors of long standing.d. All of the above
Which of the following conditions or events would most likely cause an auditor to have substantial doubt about an entity's ability to continue as a going concern? Select one: O a. Significant increase in related-party transactions. O b. Research and development projects are postponed. O c. The CEO, who is key to the company's operations, resigned. O d. All of the options are correct.
A BDO audit client subject to SEC independence rules make financial reporting software. The audit client wants BDO to become a reseller of their software. The terms would be the same as those offered to any other reseller. The relationship would be immaterial to both BDO and the client. Is this permitted under SEC rules? Yes, because it is immaterial to both parties. No, because reseller arrangements are business relationships and the SEC does not permit the audit firm to have a business relationship with an audit client. Yes, because BDO is not the only reseller and would be offered the same terms as any other reseller.
Which of the following finance options is given to businesses by their suppliers? O Commercial Paper O Trade Credit O Unsecured loan O Corporate bonds What is the value of an independent audit? O t is an independent opinion about the accuracy of financial statements. O It creates an income statement and balance sheet. O it guarantees the company has not committed fraud. O It is not necessary if the company uses GAAP.
SOX, whistleblower awards is apparently wrong. Which else could be the right answer?