LEGAL LIABILITY CONCEPT CHECK 1. 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 Securities Exchange Act of […]
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Distinguish between business failure and audit risk-Why is business failure a concern to auditors?
LEGAL LIABILITY CONCEPT CHECK 1. State several factors that have affected the incidence of lawsuits against CPAs in recent years. 2. Distinguish between business failure and audit risk. Why is business failure a concern to auditors? 3. Distinguish between fraud and constructive fraud
Explain why the failure of financial statement users to differentiate among business failure, audit failure, and audit risk has resulted in lawsuits.
LEGAL LIABILITY After studying this chapter, you should be able to 5-1 Understand the litigious environment in which CPAspractice. 5-2 Explain why the failure of financial statement users to differentiate among business failure, audit failure, and audit risk has resulted in lawsuits. 5-3 Use the primary legal concepts and terms concerning accountants’ liability as a […]
Explain how the rules concerning stock ownership apply to partners and professional staff.
REVIEW QUESTIONS 4-1 (OBJECTIVE 4-1) What are the six core ethical values described by the Josephson Institute? What are some other sources of ethical values? 4-2 (OBJECTIVE 4-2) Describe an ethical dilemma. How does a person resolve an ethical dilemma? 4-3 (OBJECTIVE 4-3) Identify some of the most important ways that the profession and society […]
Explain the rule on contingent fees-Why is this rule necessary?
CONCEPT CHECK 1. Identify the circumstances under which a CPA can disclose confidential information without client permission. 2. Explain the rule on contingent fees. Why is this rule necessary?
Identify an activity that may not affect independence of mind but is likely to affect independence in appearance.
CONCEPT CHECK 1. Distinguish between independence of mind and independence in appearance. 2.Identify an activity that may not affect independence of mind but is likely to affect independence in appearance. 3. Explain the role of the audit committee in enhancing auditor independence.
Explain the conceptual framework for the Rules of Conduct and how it should be applied.
PROFESSIONAL ETHICS CONCEPT CHECK 1. What is the purpose of the Principles of Professional Conduct? Identify the six principles. 2. Explain the conceptual framework for the Rules of Conduct and how it should be applied.
Explain the importance of ethical conduct for the accounting profession.
PROFESSIONAL ETHICS After studying this chapter, you should be able to 4-1 Distinguish ethical from unethical behavior in personal and professional contexts. 4-2 Resolve ethical dilemmas using an ethical framework. 4-3 Explain the importance of ethical conduct for the accounting profession. 4-4 Describe the purpose and content of the AICPA Code of Professional Conduct. 4-5 […]
Which of the following is not a required element of a standard unmodified opinion audit report issued in accordance with AICPA auditing standards?
MULTIPLE CHOICE QUESTIONS FROM CPA EXAMINATIONS The following questions concern unmodified opinionaudit reports. Choose the best response. a. Which of the following is not a required element of a standard unmodified opinion audit report issued in accordance with AICPA auditing standards? (1) A title that emphasizes the report is from an independent auditor (2) The […]
What are the purposes of the auditor’s responsibilities section in the auditor’s report?
REVIEW QUESTIONS 3-1 (OBJECTIVE 3-1) Explain why auditors’ reports are important to users of financial statements and why it is desirable to have standard wording. 3-2 (OBJECTIVE 3-1) What are the purposes of the opinion section in the auditor’s report? Identify the most important information included in the opinion section. 3-3 (OBJECTIVE 3-1) What are […]
