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LESSON _2 - and together with its own standards to set the...

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Exercise 2-1: During 2001, Enron, one of the largest public accounting firm, was under SEC investigation for accounting practices fraud. Shortly after Enron scandals, numerous other scandals (like Tyco, WorldCom, Xerox, Adelphia, and Ahold), and several of the large public accounting firms were uncovered. Therefore, the consumer started loosing confident in those public accounting who assumed to have the best and honest knowledge to certify their own works. Under this pressure, the Congress passed the Sarbanes-Oxley Act in 2002; and they transferred authority to set and enforce the auditing standards for public accounting audits to PCAOB. Exercise 2-6: The three categories of GAAS are: general standards, standards of field work, and standards of reporting. The Statements on Auditing Standards (SAS) are issued by the Auditing Standards Board and are considered interpretations of GAAS. Then, PCAOB adopted these auditing standards,
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Unformatted text preview: and together with its own standards to set the minimum requirements on the auditors’ performance. Exercise 2-13: The SEC is the government agency that administers the Securities Act of 1933, the Securities Exchange Act of 1934, and the Sarbanes-Oxley Act of 2002. The SEC has responsibility and authority to oversee the establishment of accounting and auditing standards. Exercise 2-15: D Exercise 2-16: A Exercise 2-17: C Exercise 2-18: C Exercise 2-19: C Exercise 2-20: A Exercise 2-21: B Exercise 2-22: A Exercise 2-23: B Exercise 2-26: Item Number Type of Audit Type of Auditor a. Operational Government b. Financial statement External c. Compliance or operational Internal or external d. Forensic Internal, external, or forensic e. Operational Government, external, or internal f. Operational Internal or external g. Compliance Government h. Compliance or forensic Government, external, or forensic...
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LESSON _2 - and together with its own standards to set the...

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