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Unformatted text preview: CHAPTER 2 THE PUBLIC ACCOUNTING PROFESSION AND THE AUDIT PROCESS Answers to Review Questions 2-1 The AICPA issues the following standards: Statements on Auditing Standards Statements on Standards for Attestation Engagements Statements on Standards for Accounting and Review Services Statements on Quality Control Standards Standards for Performing and Reporting on Peer Reviews Statements on Standards for Consulting Services Statements on Standards for Tax Services 2-2 Documents frequently encountered by auditors under the Securities Exchange Act of 1934 are S forms and 10K , 10Q , and 8K . S forms are used for the issuance of securities and contain the audited financial statements of the registrant. The 10K and 10Q are, respectively, the annual and quarterly reports, which include the financial statements that are filed with the SEC by a publicly traded entity. An 8K is filed whenever a significant event occurs which may be of interest to investors. 2-3 Public accounting firms are organized as proprietorships, general or limited liability partnerships, or professional corporations. Most states prohibit public accounting firms from organizing as general corporations. A limited liability partnership (LLP) is a special form of partnership where the partners are not personally responsible for firm liabilities arising from other partners' and most employees' negligent acts. However, the assets of the partnership are available for settlements of lawsuits resulting from other partners' or employees' acts....
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- Summer '09