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14 Cards in this Set
- Front
- Back
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Under the forseeable third party approach the auditor is generally liable to the bank which subsequently grants a loan for: |
Either ordinary or gross negligence |
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Under Section 10 of the 1934 SEX auditors are liable to security purchasers for: |
Existence of scienter (intent) |
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The burden of proof for recovery of losses from auditors under the SX Act of 1934 is _____ the SX Act of 1933 |
Greater than |
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Which court case highlighted the need for obtaining engagement letters for professional services? |
1136 Tenants Corporation v. Rothenberg |
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Under the Ultramares rule,to which of the following parties will an accountant be liable for ordinary negligence? Parties in privity Foreseen parties |
Yes to parties in privity, but not to foreseen parties |
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Inquiries and analytical procedures ordinarily form the basis for which type of engagement? |
Review |
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The PCAOB has authority to establish which of the following relating to public companies? Attestation standards Ethics standards |
Yes to both |
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What is not a financial statement assertion relating to account balances?
Name three that do relate to account balances: |
Recorded value and discounts
Completeness Existence Rights and obligations |
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Which of the following is not an assertion made by mgmt about an account balance? Relevance Existence Valuation Rights and Obligations |
Relevance |
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Tests for unrecorded assets typically involve: |
Tracing from source documents to recorded journal entries |
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Risk Formula |
Inherent risk * control risk * detection risk = Audit risk |
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When control testing reveals that controls are operating as anticipated, it is most likely that the assessed level of control risk will be ___________ the preliminary assessed level of control risk |
Equal to |
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If the auditors do not perform tests of controls for certain assertions, |
They must assess control risk at the maximum level for those assertions |
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When auditors have chosen to test a control, the tolerable rate normally _________ the expected rate of deviations in the sample? |
exceeds |
