Accounting Archives - Page 25 of 109

Explain the objective of conducting an audit of financial statements and an audit of internal control

Posted on February 9, 2023 by Shady

ASSIGNMENT Explain the objective of conducting an audit of financial statements and an audit of internal control. Distinguish management’s responsibility for the financial statements from the auditor’s responsibility for verifying those statements. Describe the key elements of an effective professional judgment process. Distinguish between management’s and the auditor’s responsibility for the financialstatements being audited. 2. […]

Explain the objective of conducting an audit of financial statements and an audit of internal controls.

Posted on February 9, 2023 by Shady

ASSIGNMENT 6-1 Explain the objective of conducting an audit of financial statements and an audit of internal controls. 6-2 Distinguish management’s responsibility for the financial statements from the auditor’s responsibility for verifying those statements.6-3 Explain the auditor’s responsibility for discovering material misstatements due to fraud or error.6-4 Describe the need to maintain professional skepticism when […]

What theory or theories of liability, if any, are available to Whitlow & Company’s customers and shareholders under common law?

Posted on February 9, 2023 by Shady

CASE 5-28 (OBJECTIVES 5-5, 5-6) Part 1. Whitlow & Company is a brokerage firm registered underthe Securities Exchange Act of 1934. The act requires such a brokerage firm to file auditedfinancial statements with the SEC annually. Mitchell & Moss, Whitlow’s CPAs, performedthe annual audit for the year ended December 31, 2019, and rendered an unqualifiedopinion, […]

The litigation release does not discuss the role of the auditor. Given the nature of the fraud, do you believe the auditor will be found liable if sued under the 1934 Securities Act?

Posted on February 9, 2023 by Shady

TASK 5-25 (OBJECTIVES 5-1, 5-2, 5-6) Taylor Bean & Whitaker Mortgage Corp. (Taylor Bean) was aFlorida mortgage lender. Once one of the nation’s largest privately held mortgage compa-nies, the company collapsed in 2009 after a multibillion dollar mortgage fraud unraveled.RequiredRequiredIn-classDiscussion LEGAL LIABILITY The downfall of Taylor Bean also triggered the collapse of Colonial Bank in […]

Discuss whether you believe Horton will be found liable to the purchasers of common stock.

Posted on February 9, 2023 by Shady

5-23 (OBJECTIVES 5-5, 5-6) In order to expand its operations, Gibson Corp. raised $5 millionin a public offering of common stock, and also negotiated a $2 million loan from CitizensNational Bank. In connection with this financing, Gibson engaged Horton & Co., CPAs, toaudit Gibson’s financial statements. Horton knew that the sole purpose of the audit […]

Based on the ruling in Hochfelder v. Ernst & Ernst, an auditor generally must have knowl- edge and ___________ to be found guilty of a violation of Rule 10b-5 of the 1934 Act.

Posted on February 9, 2023 by Shady

MULTIPLE CHOICE QUESTIONS FROM BECKER CPA EXAM REVIEW LEGAL LIABILITYDISCUSSION QUESTIONS AND PROBLEMS 5-17 (OBJECTIVES 5-3, 5-4, 5-5, 5-6) Following are eight statements with missing terms involving auditor legal liability. 1. ________________ is generally only available as a defense in suits brought by clients. 2. Under the Ultramares doctrine, an auditor is generally not liable […]

The customers have instituted legal action against Donalds based on Section 10b and Rule 10b-5 of the Securities Exchange Act of 1934. Which of the following is likely to be Donalds’ best defense?

Posted on February 9, 2023 by Shady

MULTIPLE CHOICE QUESTIONS FROM CPA EXAMINATIONS 5-14 (OBJECTIVES 5-4, 5-5) The following questions concern CPA firms’ liability under com-mon law. Choose the best response.a. In a common law action against an accountant, lack of privity is a viable defense if theplaintiff(1) is the client’s creditor who sues the accountant for negligence.(2) can prove the presence […]

Distinguish between audit risk and audit failure. Why is there at least some level of audit risk on every audit engagement?

Posted on February 9, 2023 by Shady

REVIEW QUESTIONS 5-1 (OBJECTIVE 5-1) Lawsuits against CPA firms continue to increase. State your opinion ofthe positive and negative effects of the increased litigation on CPAs and on society. 5-2 (OBJECTIVE 5-2) Distinguish between audit risk and audit failure. Why is there at leastsome level of audit risk on every audit engagement? 5-3 (OBJECTIVE 5-3) […]

Compare and contrast traditional auditors’ legal responsibilities to clients and third-party users under common law. How has that law changed in recent years?

Posted on February 9, 2023 by Shady

ASSIGNMENT What are the four major sources of auditors’ legal liability?2. Compare and contrast traditional auditors’ legal responsibilities to clients and third-party users under common law. How has that law changed in recent years?3. What are the auditor’s possible defenses against lawsuits filed under the SecuritiesExchange Act of 1934

What position did Burns hold within the audit firm and how long had he served in that position?

Posted on February 9, 2023 by Shady

ASSIGNMENT 4-29 (OBJECTIVE 4-8) Visit the PCAOB’s website (www.pcaobus.org) and locate the PCAOB’sSettled Disciplinary Order against David M. Burns issued on December 19, 2017, to answer the following questions: a. What position did Burns hold within the audit firm and how long had he served inthat position? b. What audit client was related to this […]

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Category: Accounting

Explain the objective of conducting an audit of financial statements and an audit of internal controls.

What theory or theories of liability, if any, are available to Whitlow & Company’s customers and shareholders under common law?

The litigation release does not discuss the role of the auditor. Given the nature of the fraud, do you believe the auditor will be found liable if sued under the 1934 Securities Act?

Discuss whether you believe Horton will be found liable to the purchasers of common stock.

Based on the ruling in Hochfelder v. Ernst & Ernst, an auditor generally must have knowl- edge and ___________ to be found guilty of a violation of Rule 10b-5 of the 1934 Act.

The customers have instituted legal action against Donalds based on Section 10b and Rule 10b-5 of the Securities Exchange Act of 1934. Which of the following is likely to be Donalds’ best defense?

Distinguish between audit risk and audit failure. Why is there at least some level of audit risk on every audit engagement?

Compare and contrast traditional auditors’ legal responsibilities to clients and third-party users under common law. How has that law changed in recent years?

What position did Burns hold within the audit firm and how long had he served in that position?