Which of the following statements describes the expectations gap as it relates

Which of the following statements describes the

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22. Which of the following statements describes the expectations gap as it relates to audited financial statements?
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a. Investors believe that an unqualified audit report guarantees that an investment in the audited company is riskfree.b. Investors believe that an unqualified audit report is an insurance policy against losses from a risky investment.c. Investors believe they are entitled to recover losses on investments for which the auditor provided anunqualified opinion on the financial statements.d. All of the above.ANSWER: d 23. A jury has determined that Jason Pruitt, CPA, is 20% at fault for losses suffered by investors who relied on materiallymisstated financial statements. The jury found that Pruitt’s co-defendants, the client company and the company’sCEO, are each 40% at fault. The company is bankrupt, and only Pruitt and the CEO have adequate resources to paydamages. Under joint and several liability, what is the likely percentage of damages that Pruitt will pay? 24. Which is the best definition of scienter? 25. Which of the following may an auditor use as a defense under the Securities Act of 1933? 26. What is the scope of applicability of the auditing standards of the AICPA? a. Nonpublic companies traded in non-U.S. markets.b. Nonpublic companies in the U.S.c. Public companies traded in non-U.S. markets.d. Public companies traded in the U.S.ANSWER: b 27. Which of the following organizations provides auditing standards for public companies?
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28. What is management’s responsibility with respect to the conduct of an audit? 29. Which of the following is the primary assertion related to testing inventory on hand to see if it includes consignmentgoods?
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