A) a misstatement is made and there is both knowledge of its falsity and the intent to deceive. B) a misstatement is made and there is knowledge of its falsity but no intent to deceive. C) the auditor lacks even slight care in the performance in performing the audit. D) the auditor has an absence of reasonable care in the performance of the audit. A) a misstatement is made and there is both knowledge of its falsity and the intent to deceive. B) a misstatement is made and there is knowledge of its falsity but no intent to deceive. C) the auditor lacks even slight care in the performance in performing the audit. D) the auditor has an absence of reasonable care in the performance of the audit.

Exam 4: Legal Liability Considerations for Auditors

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The term "audit failure" refers to the situation when the auditor has followed auditing standards yet still fails to discover that the client's financial statements are materially misstated.

(True/False)

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Question 101

Recklessness in the case of an audit is present if the auditor knew an adequate audit was not done but still issued an opinion,even though there was no intent to deceive financial statement users.This description is the legal term for:

(Multiple Choice)

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Question 102

The standard of due care to which the auditor is expected to adhere to in the performance of the audit is referred to as the:

(Multiple Choice)

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Question 103

CPAs can be held liable for criminal activity under both state and federal laws.Infamous cases have involved United States vs.Natelli and ESM Government Securities v.Alexander Grant and Co.Discuss what occurred and prepare a summary of the court findings.

(Essay)

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Question 104

In the auditing environment,failure to meet auditing standards is often:

(Multiple Choice)

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Question 105

One of the changes in auditing procedure which was brought about as a result of the 1136 Tenants case was that auditors were encouraged to begin using:

(Multiple Choice)

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Question 106

Under the Securities Act of 1933:

(Multiple Choice)

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Question 107

Fraud occurs when:

(Multiple Choice)

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Question 108

There are four major sources of an auditor's legal liability.One source is liability to the audit client.List the other three sources.

(Essay)

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Question 109

Section 10 and Rule 10b-5 of the Securities Exchange Act of 1934 are often referred to as:

(Multiple Choice)

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Question 110

An example of auditor legal liability to third parties under common law would be the federal government prosecuting an auditor for knowingly issuing an incorrect audit report.

(True/False)

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Question 111

Discuss some of the steps individual practicing auditors can take to minimize their legal liability.

(Essay)

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Question 112

The standard of due care to which the auditor is expected to be held is referred to as the prudent person concept.

(True/False)

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Question 113

Three approaches to the application of the foreseen users' concept are (1)the Credit Alliance approach,(2)the restatement of torts approach,and (3)the foreseeable user approach.Summarize each of these three approaches.

(Essay)

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Question 114

An example of a breach of contract would likely include:

(Multiple Choice)

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Question 115

Showing 101 - 115 of 115

Exam 4: Legal Liability Considerations for Auditors

The term "audit failure" refers to the situation when the auditor has followed auditing standards yet still fails to discover that the client's financial statements are materially misstated.

Recklessness in the case of an audit is present if the auditor knew an adequate audit was not done but still issued an opinion,even though there was no intent to deceive financial statement users.This description is the legal term for:

The standard of due care to which the auditor is expected to adhere to in the performance of the audit is referred to as the:

CPAs can be held liable for criminal activity under both state and federal laws.Infamous cases have involved United States vs.Natelli and ESM Government Securities v.Alexander Grant and Co.Discuss what occurred and prepare a summary of the court findings.

In the auditing environment,failure to meet auditing standards is often:

One of the changes in auditing procedure which was brought about as a result of the 1136 Tenants case was that auditors were encouraged to begin using:

Under the Securities Act of 1933:

Fraud occurs when:

There are four major sources of an auditor's legal liability.One source is liability to the audit client.List the other three sources.

Section 10 and Rule 10b-5 of the Securities Exchange Act of 1934 are often referred to as:

An example of auditor legal liability to third parties under common law would be the federal government prosecuting an auditor for knowingly issuing an incorrect audit report.

Discuss some of the steps individual practicing auditors can take to minimize their legal liability.

The standard of due care to which the auditor is expected to be held is referred to as the prudent person concept.

Three approaches to the application of the foreseen users' concept are (1)the Credit Alliance approach,(2)the restatement of torts approach,and (3)the foreseeable user approach.Summarize each of these three approaches.

An example of a breach of contract would likely include:

The Assurance Services Market

The Audit Standards Setting Process

Audit Reports

Ethics and the Audit Profession

Audit Responsibilities and Objectives

Nature and Type of Audit Evidence

Audit Planning

Considering Materiality and Audit Risk

Considering Internal Control

Considering the Risk of Fraud

Implications of Information Technology for the Audit Process

Developing the Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Inventory and Warehousing Cycle

Audit of the Payroll and Personnel Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Audit Completion

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

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