Chapter 16, Problem 50RDC

a.

To determine

Describe the extent to which a CPA firm’s potential liability to a third party is increased in SEC registration audit.

b.

To determine

Describe the implications of the IRS investigation and additional investigative procedures that the auditors should undertake relating to the examination of 2014 financial statements.

c.

To determine

Identify if the auditors can validly refuse to surrender the subpoenaed working paper to IRS.