Chap 1 Notes_Part_11

Chap 1 Notes_Part_11 - Opinion regarding the financial...

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Type of Engagement Level of Assurance Fee, Liability Exposure, Evidence Language Standard Setter Authoritative Standard Audit Positive High Fairly presented PCAOB, ASB AS, SAS Review Limited, negative Medium Nothing came to our attention… ARSC SSARS Compilation None Low Have not audited or reviewed, express no opinion ARSC SSARS Why are reviews and compilations lumped together? How are audits and reviews similar? Does the CPA just accept what the client provides in a compilation engagement?
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Generally Accepted Auditing Standards GENERAL Adequate technical training and proficiency (competence) Independence (ethics and integrity) Due professional care (work effort) FIELD WORK Adequate planning and supervision Sufficient understanding of the entity & its environment, including its internal control Sufficient appropriate evidence REPORTING Generally accepted accounting principles Consistency Informative disclosures
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Unformatted text preview: Opinion regarding the financial statements taken as a whole LS1: Ethics Case You are one of 56 partners in a high quality regional CPA firm of Muskal and Silvers, LLP. Due in good measure to the quality and frequency of your advice, one of your clients has grown from a small local concern into a successful regional company. It needs capital from a public offering to go national. Though the underwriters have advised them to engage a Big 4 firm, the owner knows he owes his success to you and wants to give you first right of refusal. The billing of the client has grown over the years and it is painful to see the loss of the firms largest client. The firm has not audited a publicly listed company before but understands this entails complying with SEC filing regulations. What are the ethical implications of Muskal and Silvers accepting this engagement? List the additional complications involved in an SEC audit....
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Chap 1 Notes_Part_11 - Opinion regarding the financial...

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