1. In late 2001 through 2002, the accounting profession faced a "crisis of credibility. Describe the events that led up this crisis. 2. In response to this crisis, the U.S. Congress passed a new legislation in June 2002. Please name this legislation. 3. This legislation established a new regulator over the CPA firms that audit the publicly traded companies in the U.S. Please name this new regulatory agency and explain the major responsibilities of this board. 4. After 2003, AICPA and PCAOB have different regulatory powers in the audit market. Please describe the details to the professor. 5. Explain the following statement: One contribution of the independent auditor is to lend credibility to financial statements. 6. The professor mentioned that a firm faces both business risk and information risk. Which one is directly affected by the auditors? Why? 7. When the SEC was established? What's the primary responsibility of the SEC as a federal governmental agency? 8. Please list the four management assertions on account balances and five management assertions on transactions. Please briefly explain those colons to your professor. Professor might give you examples and ask you to identify the relevant account balance assertion or accounting transaction assertion. 9. List the various levels or positions of accounting personnel in the audit department of a large public accounting firms. Do "seniors" mean old citizens above 60 at an accounting firm? 10. What are the impacts of the SOX Act of 2002 on auditors and management? 11. If an executive tampers accounting records and manipulates reported numbers at a publicly-traded firm, what's the maximum prison term he can get under the Sarbanes-Oxley Act of 2002? 12. Explain briefly the auditor's responsibility for detecting illegal activities by audit clients. 13. Who is primarily responsible for the fairness of the financial statements at a publicly traded firm? The management, board of directors, auditor, or the SEC? 14. When a CPA firm completes an audit of a nonpublic firm and issues an audit report. Does it express an opinion on the client's financial statements, internal control or both? Give your reasons here. 15. Please describe 4 different types of audit opinions and conditions under which each audit opinion will be issued. 16. In Chapter 2, the textbook authors list 11 AICPA principles underlying an audit conducted in accordance with GAAS. You will be required to explain the three principles on personal responsibilities of the auditor, and 5 principles on auditor actions in performing the audit. You are required to identify and apply those standards in some simple real-life scenario. 17. Who decides the accounting standards in the U.S.A? PCAOB, AICPA or the SEC? 18. When are analytical procedures useful? Before the audit, during the audit, or at the end of annual audit? 19. Describe the relation between detection risk and audit risk? Out of inherent risk. control risk, and detection risk, which risk is solely controlled by the auditor? 20. What are the primary functions of audit working papers (documentation)? 21. Please explain to the professor briefly the definition of materiality as defined by the FASB? 22. After 1960s, auditor's reports can only tell users that whether one firm's financial 1. In late 2001 through 2002, the accounting profession faced a "crisis of credibility. Describe the events that led up this crisis. 2. In response to this crisis, the U.S. Congress passed a new legislation in June 2002. Please name this legislation. 3. This legislation established a new regulator over the CPA firms that audit the publicly traded companies in the U.S. Please name this new regulatory agency and explain the major responsibilities of this board. 4. After 2003, AICPA and PCAOB have different regulatory powers in the audit market. Please describe the details to the professor. 5. Explain the following statement: One contribution of the independent auditor is to lend credibility to financial statements. 6. The professor mentioned that a firm faces both business risk and information risk. Which one is directly affected by the auditors? Why? 7. When the SEC was established? What's the primary responsibility of the SEC as a federal governmental agency? 8. Please list the four management assertions on account balances and five management assertions on transactions. Please briefly explain those colons to your professor. Professor might give you examples and ask you to identify the relevant account balance assertion or accounting transaction assertion. 9. List the various levels or positions of accounting personnel in the audit department of a large public accounting firms. Do "seniors" mean old citizens above 60 at an accounting firm? 10. What are the impacts of the SOX Act of 2002 on auditors and management? 11. If an executive tampers accounting records and manipulates reported numbers at a publicly-traded firm, what's the maximum prison term he can get under the Sarbanes-Oxley Act of 2002? 12. Explain briefly the auditor's responsibility for detecting illegal activities by audit clients. 13. Who is primarily responsible for the fairness of the financial statements at a publicly traded firm? The management, board of directors, auditor, or the SEC? 14. When a CPA firm completes an audit of a nonpublic firm and issues an audit report. Does it express an opinion on the client's financial statements, internal control or both? Give your reasons here. 15. Please describe 4 different types of audit opinions and conditions under which each audit opinion will be issued. 16. In Chapter 2, the textbook authors list 11 AICPA principles underlying an audit conducted in accordance with GAAS. You will be required to explain the three principles on personal responsibilities of the auditor, and 5 principles on auditor actions in performing the audit. You are required to identify and apply those standards in some simple real-life scenario. 17. Who decides the accounting standards in the U.S.A? PCAOB, AICPA or the SEC? 18. When are analytical procedures useful? Before the audit, during the audit, or at the end of annual audit? 19. Describe the relation between detection risk and audit risk? Out of inherent risk. control risk, and detection risk, which risk is solely controlled by the auditor? 20. What are the primary functions of audit working papers (documentation)? 21. Please explain to the professor briefly the definition of materiality as defined by the FASB? 22. After 1960s, auditor's reports can only tell users that whether one firm's financial