The Sarbanes–Oxley Act of 2002 generally prohibits public accounting firms froma. Acting in a managerial decision-making role for an audit client.b. Auditing the firm’s own work on an audit client.c. Providing tax consulting to an audit client without audit committee approval.d. All of the above.

The Sarbanes–Oxley Act of 2002 generally prohibits public accounting firms froma. Acting in a managerial decision-making role for an audit client.b. Auditing the firm’s own work on an audit client.c. Providing tax consulting to an audit client without audit committee approval.d. All of the above.

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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Which of the following is not a Sarbanes-Oxley Actrequirement intended to reduce fraud opportunities?a. Increase fines and jail sentences for fraud perpetrators.b. All public companies establish an audit committee ofindependent directors.c. Management of all public companies evaluates andreports on the effectiveness of internal control overfinancial reporting.d. External auditors of large public companies evaluateand report on the effectiveness of internal control overfinancial reporting.
The Sarbanes–Oxley Acta. requires the SEC to establish a federaloversight board for the accounting industry.b. requires CEOs to certify periodic financialstatements.c. subjects auditors, accountants, andemployees to imprisonment for destroyingfinancial documents.d. prohibits many types of consulting servicesby accounting firms.e. All of the above are true.
Negative Assurance in Review Reports. One portion of the report on a review services engagement is the following: “Based on my review, I am not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformitywith generally accepted accounting principles [or another framework for financial reporting].”Required:a. Is this paragraph a “negative assurance” given by the accountants?b. Why is negative assurance generally prohibited in audit reports?c. What justification is there for permitting negative assurance in a review services report on unaudited financial statements and on interim financial information?
Section 404(a) of the Sarbanes–Oxley Act requires management toissue a report on internal control over financial reporting. Identify the specific Section404(a) reporting requirements for management.
Under Sarbanes–Oxley and PCAOB rules, ensuring that the auditor is independent inappearance is the responsibility ofa. The public accounting firm.b. Senior management.c. The audit committee.d. The PCAOB
Audit committees have an essential role to play in ensuring the integrity and transparency of corporate reporting. Therefore, It would not be appropriate for the auditor to initiate a discussion with the audit committee concerning: Select one:a. the extent to which change in the company's organisation will influence the scope of the audit.b. Details of potential problems that the auditor believes might cause a modified opinion. c. The extent to which the work of internal auditors will influence the scope of the audit.d. Details of the procedures that the auditor intends to apply.
Which of the following is NOT an auditor's responsibility? Obligation to report any breach of the law Obligation to report to members Obligation to report to the bankers of the corporation Signing the audit report is a requirement.