Questions from Auditing and Assurance

Q: Define the term third-party beneficiary.

Define the term third-party beneficiary.

Q: Distinguish between common law and statutory law.

Distinguish between common law and statutory law.

Q: Briefly describe the differences in liability to third parties under the known

Briefly describe the differences in liability to third parties under the known user, foreseen user, and foreseeable user approaches to CPA liability.

Q: Briefly describe the different common law precedents set by the Ultramares v

Briefly describe the different common law precedents set by the Ultramares v. Touche & Co. case and the Rosenblum v. Adler case.

Q: What landmark case was embraced by the court in the case of

What landmark case was embraced by the court in the case of Credit Alliance Corp. v. Arthur Andersen & Co.? Identify the two factors that the court stated must be proved for the auditors to be held li...

Q: Should the working trial balance prepared by the auditors include revenue and

Should the working trial balance prepared by the auditors include revenue and expense accounts if the balances of these accounts for the audit year have been closed into retained earnings prior to the...

Q: Compare auditors’ common law liability to clients and third-party beneficiaries

Compare auditors’ common law liability to clients and third-party beneficiaries with their common law liability to other third parties.

Q: The overall risk of the investment in a business includes both business

The overall risk of the investment in a business includes both business risk and information risk. Contrast these two types of risk. Which one is most directly affected by the auditors?

Q: Why are the final figures from the prior year’s audit included in

Why are the final figures from the prior year’s audit included in a working trial balance or lead schedule?

Q: Should the auditors prepare adjusting journal entries to correct all errors they

Should the auditors prepare adjusting journal entries to correct all errors they discover in the accounting records for the year under audit? Explain.