Provide Short Answers to the Following Questions.
- Describe the auditor’s responsibilities for laws and regulations that have an indirect effect on the financial statements.
- Describe the auditor’s responsibilities for laws and regulations that have a direct effect on the financial statements.
- Describe the relationship between the SEC and PCAOB.
- Describe the characteristics of a situation that would be considered an audit failure.
- The audited financial statements were found to contain a material misstatement after the financial statements and audit report were issued. Explain why an auditor might be found to not be responsible for having not detected the misstatement.
- The auditor identified conditions and events affecting the audit client’s ability to continue in business.
- Describe a set circumstances in which the auditor would not modify the audit report.
- Describe a set of circumstance in which the auditor would modify the audit report.
- Describe how the audit report would be modified under item 5.b., above, and provide some example wording on what the modification would look like.
- Describe the steps an auditor would take to satisfy the following audit objectives for sales and accounts receivable:
- Posting and summarization
- Detail tie-in
