Please try to answer all questions.

Which of the following is false with regards to audit responsibility? The auditor of a public company is required to certify the annual financial statements. Auditing standards make no distinction between error or fraud; in either case, the auditor must obtain reasonable assuran misstatement. The auditor's responsibility for illegal acts is the same as for errors and fraud. Reasonable assurance is a high, but not absolute, level of assurance. -> Moving to the next question prevents changes to this answer. Question 4 Which of the following is not a factor that has increased litigation against CPAs? The tendency of society to accept lawsuits by injured parties against anyone who might be able to provide compen CPA firms are willing to settle out of court to avoid adverse publicity. Increasing incompetence within the profession The difficulty of judges and jurors to understand accounting. A Moving to the next question prevents changes to this answer. Question 6 Which of the following is false regarding the financial statement cycle? The cycle approach keeps closely related types of transactions and account balances in the same segment. Sales and collections are a part of the same cycle. Several accounts will be maintained and audited as one transaction cycle. Inventory and capital acquisition are in the same cycle. destion / Which of the following is false regarding legal liability? Foreseeable users are users the auditor should have reasonably been able to foresee as likely users of the client's financial statements. The Sarbanes-Oxley act requires the auditor's to certify the annual financial statements filed with the SEC. The SEC has the authority to sanction. Rule 10-5b of the Securities Act of 1934 is often called the antifraud provision Which of the following is false regarding common and federal securities laws? The securities act of 1933 deals only with the reporting requirements for companies issuing new securities. Ultramares doctrine states that ordinary negligence is insufficient for liability to third parties because of the lack of pp Rule 106-5 of the securities exchange act of 1934 is also known as the antifraud provision. A scienter is a specialist used in Rule 106-5 investigations. Question 10 Which of the following is true about the assertions? Classification and understandability addresses whether assets are the rights of the entity and whether liabilities are the obligations of the entity The existence assertion concerns whether recorded transactions included in the financial statements actually occurred. The accuracy assertion addresses whether transactions have been recorded at correct amounts. The occurrence assertion addresses whether all transactions that should be included in the financial statements are in fact included. muestion 12 Which of the following is false regarding legal cases discussed in the text? Bily v. Arthur Young did not uphold the restatement doctrine. Hochfelder v. Ernst & Ernst ruled that scienter is required before CPAs can be held liable. Ultramares corporation v. Touche established Ultramares doctrine. United States v. Natelli sentenced two CPAs with criminal liability under the 1934 act. Which of the following is false regarding management assertions? Auditors must understand the assertions to do adequate audits. Management assertions are not made at the transaction level. management assertions are implied or expressed representations by management about classes of transactions and the related account Assertions are classified into three categories Which of the following is false regarding legal liability? Lack of duty to perform is a valid defense for CPAs. There are four main sources of legal liability. The Securities Act of 1933 makes it illegal to offer a bribe to an official of a foreign country. Ultramares doctrine states that privity must be present. uestion 15 The auditors determine which disclosures must be presented in the financial statements. True False