Research Assignment

Online Professional Standards

Instructions: Identify the appropriate professional standard and paragraph number for the following situations. Situation zero is an example. Each of the ten graded situations is worth 4 points for a total of 40 points.

Situation 0: Section 404(a) of the Sarbanes-Oxley Act of 2002 requires management of all public companies to include, in the 10-K, an assessment report on the effectiveness of internal control over financial reporting. Identify the appropriate auditing standard and paragraph number that requires an auditor to audit managements assessment report and complete an audit of the financial statements.

Standard: AS 2201 Paragraph: .01

Situation 1: The SEC does not require an Integrated Audit for nonaccelerated filers. However, an audit of financial statements is mandated. Identify the appropriate auditing standard and paragraph number that requires issuer companies to communicate, in writing to management and the audit committee, all significant deficiencies and material weaknesses in internal control discovered during the audit of the financial statements.

Standard: ? Paragraph: ?

Situation 2: An auditor of a public company must conclude if substantial doubt exits regarding the clients ability to continue as a going concern for a reasonable period of time. Identify the appropriate auditing standard and paragraph number that requires the auditor to obtain information about managements plans to mitigate the going concern issue and assess the likelihood that such plans can be effectively implemented.

Standard: ? Paragraph: ?

Situation 3: An auditor of a public company may hire a specialist to help complete the work on an engagement. Identify the appropriate auditing standard and paragraph number that says those who have expertise in information technology or income taxes are not considered specialists.

Standard: ? Paragraph: ?

Situation 4: The auditing standards for a public company audit identify three conditions that generally exist when fraud has been committed by the client. Identify the appropriate auditing standard and paragraph number that explains, what is commonly called, the fraud triangle.

Standard: ? Paragraph: ?

Situation 5: The auditing standards for a non-public company are designed to assist the auditor in identifying material misstatement of the financial statements due to noncompliance with laws and regulations. However, the auditor is not responsible for preventing noncompliance and cannot be expected to detect noncompliance with all laws and regulations. Identify the appropriate standard and paragraph.

Standard: ? Paragraph: ?

Situation 6: Auditing standards discuss the auditor's responsibilities when, subsequent to the audit report release date, the auditor becomes aware that one or more auditing procedures that the auditor considered necessary in the circumstances existing at the time of the audit were omitted from the audit of the financial statements. Identify the appropriate standard and paragraph number that if, subsequent to the report release date, the auditor of a non-public company becomes aware of an omitted procedure, the auditor should assess the effect of the omitted procedure on the auditor's present ability to support the previously expressed opinion on the financial statements.

Standard: ? Paragraph: ?

Situation 7: The auditor of a non-public company should express an adverse opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements. Identify the appropriate standard and paragraph number.

Standard: ? Paragraph: ?

Situation 8: The AICPA auditing standards address the auditor's responsibilities relating to other information, whether financial or nonfinancial information (other than financial statements and the auditor's report thereon), included in an entity's annual report. Identify the appropriate standard and paragraph number that requires the auditor to read and consider the other information because other information may undermine the credibility of the financial statements and the auditor's report thereon.

Standard: ? Paragraph: ?

Situation 9: Accepting a gift from an attest client during the period of the professional engagement impairs independence if the value of the gift to the recipient is not clearly insignificant. Identify the appropriate section and paragraph number(s) from the AICPA Code of Professional Conduct.

Code Section: ? Paragraph(s): ?

Situation 10: Failure of an AICPA member to use the CPA designation in a manner allowed by the issuing state board of accountancy is an act discreditable to the profession. Identify the appropriate section and paragraph number(s) from the Code of Professional Conduct.

Code Section: ? Paragraph(s): ?