Principles of Auditing & Other Assurance Services Chapter 3 Exam Bank Solution Manual Already Passed
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Course
Principles of Auditing & Other Assurance Services
Institution
Principles Of Auditing & Other Assurance Services
Principles of Auditing & Other Assurance Services Chapter 3 Exam Bank Solution Manual Already Passed
Acceptable level of risk of noncompliance - Answers A situation in which a reasonable and informed third party who is aware of the relevant information would be expected to conclude that a member'...
Principles of Auditing & Other Assurance Services Chapter 3 Exam Bank Solution Manual Already
Passed
Acceptable level of risk of noncompliance - Answers A situation in which a reasonable and informed
third party who is aware of the relevant information would be expected to conclude that a member's
ability to comply with the rules is not compromised. For independence, this is referred to as the
acceptable level of risk to independence.
Attest engagement team - Answers Consists of individuals participating in the attest engagement,
including those who perform concurring and second partner reviews. The attest engagement team
includes all employees and contractors retained by the firm who participate in the attest engagement,
irrespective of their functional classification (for example, audit, tax, or management consulting
services), except specialists as discussed in the professional standards and individuals who perform only
routine clerical functions, such as word processing and photocopying.
Audit committee - Answers A committee of a corporation's board of directors that engages,
compensates, and oversees the work of the independent auditors, monitors activities of the internal
auditing staff, and intervenes in any disputes between management and the independent auditors.
Members of the audit committee must be independent directors, that is, members of the board of
directors who do not also serve as corporate officers or have other relationships that might impair
independence.
Close relative - Answers A parent, sibling, or nondependent child.
Covered member - Answers A covered member may be (a) an individual on the attest engagement
team; (b) an individual in a position to influence the attest engagement; (c) a partner, partner
equivalent, or manager who provides nonattest services to the attest client beginning once he or she
provides 10 hours of nonattest services to the client within any fiscal year and ending on the latter of the
date (1) the firm signs the report on the financial statements for the fiscal year during which those
services were provided, or (2) he or she no longer expects to provide 10 or more hours of nonattest
services to the attest client on a recurring basis; (d) a partner or partner equivalent in the office in which
the lead attest engagement partner or partner equivalent primarily practices in connection with the
attest engagement; (e) the firm, including the firm's employee benefit plans; or (f) an entity whose
operating, financial, or accounting policies can be controlled by any of the individuals or entities
described in (a) through (e) or by two or more such individuals or entities if they act together.
Direct financial interest - Answers A personal investment under the direct control of the investor. The
Code of Professional Conduct prohibits CPAs from having any direct financial interests in their attest
clients. Investments made by a CPA's spouse or dependents also are regarded as direct financial
interests of the CPA.
Ethical conflict - Answers An ethical dilemma. As defined in the AICPA Code of Professional Conduct, a
situation in which an individual encounters obstacles in deciding an appropriate course of action due to
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