AC 410 Unit 1 Homework Assignment NEW

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Homework Assignment NEW 1-20 Public accounting
firms are sometimes grouped into categories of
local firms, regional firms, national firms, and
international firms. Explain briefly the
characteristics of each. Include in your answer
the types of services stressed in each
group. 1-26 The Sarbanes-Oxley Act of 2002
created the Public Company Accounting Oversight
Board. Explain the major responsibilities of this
board. 2-7
2
Evaluate the following quotation If a CPA firm
completes a nonpublic company audit of Adam
Company's financial statements following AICPA
generally accepted auditing standards and is
satisfied with the results of the audit, an
unmodified audit report may be issued. On the
other hand, if no audit is performed of the
current year's financial statements, but the CPA
firm has performed satisfactory audits in prior
years, has confidence in the management of the
company, and makes a quick review of the current
year's financial statements, a qualified report
may be issued. Do you agree? Give reasons to
support your answer. 2-28 Reed, CPA, accepted an
engagement to audit the financial statements of
Smith Company. Reed's discussions with Smith's
new management and the predecessor auditor
indicated the possibility that Smith's financial
statements may be misstated due to the possible
occurrence of errors, fraud, and illegal acts. a.
Identify and describe Reed's responsibilities to
detect Smith's errors and fraud. Do not identify
specific audit procedures. b. Describe Reed's
responsibilities to detect Smith's material
noncompliance with laws. Do not identify specific
audit procedures. c. Identify and describe Reed's
responsibilities to report Smith's noncompliance
with laws.