Answered step by step
Verified Expert Solution
Question
1 Approved Answer
During a meeting between the senior audit partners of Baker CPA Firm and senior management of Fitzgerald LLC, a question has arisen about a new
During a meeting between the senior audit partners of Baker CPA Firm and senior management of Fitzgerald LLC, a question has arisen about a new lease accounting standard which requires capitalization of the majority of former operating leases. Management does not appear to have capitalized leases in adherence to this new standard. What should the auditors' response to this be? O Management will need to provide written documentation to the auditor, justifying their departure from the new standard in order to receive a clean audit opinion. The auditor should work closely with the internal audit function to ensure that moving forward, the client adheres to all rules set forth by professional bodies. The auditor should advise management that they are likely to make recommendations to ensure the client adheres to generally accepted accounting principles. Failure to abide by these recommendations could result in the auditor issuing a qualified or adverse opinion. O If management is not adhering to accounting principles and rules set forth by professional bodies, the auditor should not accept the engagement
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started