Under PCAOB standards (AS 3101) approved in 2017, all U.S. public companies will be required to disclose whether any critical audit matter (CAM) arose during the current period audit or state that there was none. True False
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Under PCAOB standards (AS 3101) approved in 2017, all U.S. public companies will be required to disclose whether any critical audit matter (CAM) arose during the current period audit or state that there was none.
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- Which required SEC filing would contain the following content? "Our auditors identified the following critical audit matter: Significant judgment may be required by the Company in determining revenue recognition for these customer agreements. a) 8-K b) Proxy c) 10-Kg 2022) sec. 01 A key criterion in auditing (both internal and external) is independence. In what way (s) can internal audit claim to be independent when the auditors are employed by the organization? (Some may find it easier to address the question by discussing specific behaviors/policies/practices required to achieve independence of internal audits.)The Sarbanes-Oxley Act achieved all of the following except Select one: a. Limits the non-audit services an independent auditor may provide to a registrant. b. Requires regular inspection of audit engagements. c. Established the PCAOB. d. Identifies the FASB as the official source of GAAP for SEC filings.
- Which of the following statements is not true with respect to the responsibility for establishing auditing standards? Multiple Choice The PCAOB issues auditing standards for the audit of issuers, subject to SEC approval. Standards issued by the Auditing Standards Board after 2003 apply to the audits of both issuers and nonissuers. The Auditing Standards Board currently issues auditing standards for the audit of nonissuers. Prior to the Sarbanes-Oxley Act, the Auditing Standards Board issued auditing standards for the audits of both issuers aClassify each of the following issues according to whether they will be (1) included in written representations in all audits, (2) included in writtenrepresentations in audits of public entities (under PCAOB standards), or (3) not included in written representations:a. Management acknowledgment of its responsibility for the fairness of the financial statements in accordance with U.S. GAAP.b. A list of pending or threatened litigation, claims, or assessments currently outstanding against the client.c. A description of recommendations that allow the client to improve the efficiency and effectiveness of its operations.d. Availability of all financial records and related data.e. Information related to the presentation and disclosure of items within the financial statements.f. Disclosure of all significant deficiencies and material weaknesses in internal control.g. Information concerning fraud involving management and employees who have significant roles in internal control.h. Auditors’…When completing the audit of internal controls for a public company, AS 2201 requires auditors to report on
- In an audit report on the effectiveness of ICFR for a public company, to what does the basis of opinion paragraph make a reference? A definition of ICFR that is taken directly from PCAOB AS 2201. O The COSO Internal Control-Integrated Framework as the criteria used as the basis for determining if ICFR are effective. O The financial statement audit report and the type of opinion that was given on the financial statements. Registration with the PCAOB and independence requirements of the SEC and other federal securities laws.Bill Novak is working on an audit of an IFRS client. In his review of the client’s interim reports, he notes that the reports are prepared on a discrete basis. That is, each interim report is viewed as a distinct period. Is this acceptable under IFRS? If so, explain how that treatment could affect comparisons to a GAAP companyAU-C 500 Audit Evidence, in the AICPA auditing standards refers to information produced by the entity. What must the auditor do to evaluate whether information provided by the client is sufficiently reliable?
- ASA570.10 requires the auditor to particularly evaluate the going concern problems and the related risk as part of the audit strategy and processes. What are the implications and the consequences for the audit if it is concluded that the going concern assumption is inappropriate and, as a result, the entity being audited is highly unlikely to continue in business in the foreseeable future? In your response and in your own words, discuss six (6) typical indicators of going concern problems and state the considerations and the additional procedures which should be included as part of the audit program.Smith and Johns, a CPA firm, was approached by Pioneer Company to conduct an audit for its financial statements for the year 2020. Smith and Johns asked Pioneer Company to grant it an approval to contact the predecessor auditor before giving its acceptance on the new engagement. Smith and Johns would most probably inquire the predecessor auditor about the following issue(s): * Management integrity Fraud and illegal acts committed in pri years Reasons for change of auditors All of the above None of the aboveAICPA and PCAOB Responsibilities. The creation of the PCAOB by the Sarbanes–OxleyAct has affected both the standards-setting process and the periodic review of the quality ofan audit firm’s work.Required:a. Identify the responsibilities of the AICPA, PCAOB, and SEC in the auditing standardssetting process.b. Which standard(s) provide guidance for the audits of public entities? Which standard(s)provide guidance for the audits of nonpublic entities?c. What role do the AICPA and PCAOB play in the periodic review of the quality of auditfirms’ work?