L22 Notes_Part_16 - court cases that have interpreted their...

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Approaches to Minimizing Legal Liability Professional Level 1. Establish stronger auditing and attestation standards. 2. Update Code of Professional Conduct and sanction members who do not comply. 3. Educate users. Firm Level 1. Institute sound quality control and review procedures. 2. Independence in fact and appearance 3. Follow sound client acceptance and retention procedures. 4. Be alert to risk factors.
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Approaches to Minimizing Legal Liability Professional Level 1. Lobbying to keep liability in check. 2. Enlist more competent professionals (CPA exam, more demanding education) better able to perform audits. Firm Level 1. LLPs and LLCs. 2. Ensure independence. 3. Investing in audit technology more likely to detect misstatements. 4. Perform and document work diligently.
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Chapter 17 Problem 8 8. Securities law applies to auditors engaged in audits of firms that issue shares to the general public. It is important that auditors understand the
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Unformatted text preview: court cases that have interpreted their liability for fair reporting under the SEC Acts of 1933 and 1934. Figures 15-7 and 15-8 list the most important of those cases. For each of the following issues, identify the court case that offers the auditor some guidance on his or her responsibilities and summarize the findings. a. What are the auditor's duties when the client conducts financial transactions that may seem significant but are not required to be disclosed under GAAP? b. To what extent does the auditor's lack of criminal intent protect him when his actions are deemed to be reckless? c. To what extent is the auditor liable under security law when her actions are neither reckless nor intended to deceive? d. What are the responsibilities of the auditor when he discovers evidence of material misstatement after fieldwork has been conducted? e. Is the auditor criminally liable when she colludes with management to...
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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L22 Notes_Part_16 - court cases that have interpreted their...

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