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What are some sanctions the SEC can bring against auditors who have violated statutory law?

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter4: Professional Legal Liability

Section: Chapter Questions

Problem 9RQSC

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4-9 What are some sanctions the SEC can bring against auditors who have violated statutory law?

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Should the SEC take tolerance on a company that recognizes and reports accounting irregularities and other frauds of the company?
Question 2 If the auditors encounter a significant scope limitation in evaluating a public company's internal control over financial reporting, which of the following types of opinions on the effectiveness of the comapny's internal control would be appropriate?: Unqualified Qualified disclaimer Adverse
How would an auditor communicate known there are violations of the law and the auditor's responsibilities according to the law?
85 Which of the following circumstances requires the modification of both the auditor’s responsibility, and the auditor’s opinion paragraphs of the auditor’s report? Group of answer choices Limitation on the scope of audit that results to qualified opinion. Auditor’s disagreement with the client management on accounting policies that requires qualified opinion. Inadequate disclosures that requires qualified opinion. Disagreement with the client management regarding accounting policies that requires adverse opinion.
What defenses are available to auditors against suits brought by clients under common law? Against suits brought by third parties under common law?
Do you believe that the SEC should prohibit auditors from providing all nonaudit services for audit clients? Use ethical reasoning to support your answer.
2. A client has departed from GAAP for what you, the auditor, considers to be justifiable. The financial statements would have been misleading if the client had not departed from GAAP. Circumstance: Type of Opinion:
Question 24 Which of the following is true regarding the auditor's responsibility related to reporting? Sufficient appropriate evidence should be obtained to afford a reasonable basis for the opinion regarding financial statements under audit. The audit opinion relates only to the client's financial statements, and does not relate to required footnotes. If the auditor has reservations about the fairness of presentation of the financial statements, the auditor does not need to provide the reason for this reservation. All of the statements provided are true.
What is the auditors responsibility regarding the noncompliance with laws by a client?
Has the accounting profession created a situation in which auditors’ ethical behavior is impaired by their professional obligations? How does the profession’s view of such obligations relate to how courts tend to view the legal liability of auditors?
Question 19 If an auditor believes that a misstatement might be intentional and the effect on the financial statements could be material the auditor should do which of the following? Resign from the engagement Discuss with the audit committee what should be done to prevent possible future future misstatements. Perform additional procedures to obtain additional evidence to determine whether fraud has occurred or is likely to have occurred and whether there is a material impact on the financial statements. Contact local authorities.