Chapter_2_answers_to_review_questions - investors. In...

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Review Questions 2-3 The Public Company Accounting Oversight Board provides oversight for auditors of public companies, including establishing auditing and quality control standards for public company audits, and performing inspections of the quality controls at audit firms performing those audits. 2-4 The purpose of the Securities and Exchange Commission is to assist in providing investors with reliable information upon which to make investment decisions. Since most reasonably large CPA firms have clients that must file reports with the SEC each year (all companies filing registration statements under the securities acts of l933 and l934 must file audited financial statements and other reports with the SEC at least once each year), the profession is highly involved with the SEC requirements. The SEC has considerable influence in setting generally accepted accounting principles and disclosure requirements for financial statements because of its authority for specifying reporting requirements considered necessary for fair disclosure to
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Unformatted text preview: investors. In addition, the SEC has power to establish rules for any CPA associated with audited financial statements submitted to the Commission. 2-7 The PCAOB has responsibility for establishing auditing standards for public companies, while the Auditing Standards Board (ASB) of the AICPA establishes auditing standards for private companies. The ASB previously had responsibility for establishing auditing standards for both public and private companies. Existing auditing standards were adopted by the PCAOB as interim auditing standards for public company audits. Multiple Choice Questions From CPA Examinations 2-16 a. (1) b. (2) c. (3) d. (3) Discussion Questions And Problems 2-22 a. International auditing standards. b. PCAOB auditing standards. c. PCAOB auditing standards (reporting in the U.K. will be under international auditing standards). d. Generally accepted auditing standards. e. International auditing standards. f. PCAOB auditing standards (due to the publicly-traded debt)....
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This note was uploaded on 02/19/2012 for the course ACCOUNTING 320 taught by Professor Rich during the Fall '12 term at Columbia College.

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