Fin 515 final exam 1

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Investors and others need a public accounting profession that performs its primary function of auditing financial statements with both the fact and the appearance of competence and independence. Integral to this reliance is the requirement that the outside auditors perform their service without being affected by economic or other interests that would call into question their objectivity and, accordingly, the reliability of their attestation.

Why is independence often considered the cornerstone of the auditing profession?

FIN 515 Week 8 Final Exam (Version 1)

This is one of the major reasons that Congress came down so hard with the Sarbanes-Oxley Act. Also, Grant Thornton recently sold its e-business consulting practice. As discussed specifically below, the final rule amendments, particularly those related to non-audit services, have been modified from the proposals.

We proposed changes to our auditor independence requirements in response to these developments. The argument proves too much; it assumes that because Congress permitted one form of potential conflict of interest, it intended to permit all forms.

Leveraging the Audit Into Consulting Services" provides a step-by-step guide for auditors to become "business advisers" to their audit clients. Charles Drott, a CPA and a forensic examiner, testified that "the only time these issues come to light.

The exercise of Fin 515 final exam 1 professional care requires observance of all general standards and fieldwork standards but adds an additional element of professionalism. They are expected to be fair both to the companies and executives who issue financial information and to the outside persons who use it.

In our judgment, the risk is present, and we should address it. Brown, Chair of the Ontario Securities Commission, testified that the importance of the perception of auditor independence "cannot be overstated. They have expanded into international networks, affiliating and marketing under a common name.

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The Commission is an advocate of effective and independent audit committees. What is the best estimate of the current stock price? Define footprinting The process of accumulating data regarding a specific network environment, usually for the purpose of finding ways to intrude into the environment.

Auditors Will Continue to Have the Expertise Necessary for Quality Audits The suggestion that the more the auditor knows about the audit client, the better its capacity to audit, is flawed. The reporting should be clear and concise and include no misleading information.

Some testified that there is no sharing of firm personnel between the consulting side and auditing side. In addition, there is more mobility of employees and an increase in dual-career families. Meyer, a Governor of the Federal Reserve Board, said in support of our proposed restriction on internal audit outsourcing, "auditor independence is more valuable than these asserted efficiencies.

You have obtained the following information. Accounting professionals have become more mobile, and geographic location of firm personnel has become less important due to advances in telecommunications. Finally, the amendments require most public companies to disclose in their annual proxy statements certain information related to, among other things, the non-audit services provided by their auditor during the most recent fiscal year.

If an inconsistency is found, investigate it completely to see if it may be just a honest error or an intentional act of misconduct. Even with these disincentives, audit failures and impairments of independence occur.

If Congress believed that all conflicts were equal in kind or degree, it would not have required that auditors be independent. The prudent auditor is one who exercises reasonable judgment, who is not expected to be omniscient, who is presumed to have knowledge special to his or her profession, who is expected to be aware of his or her own ignorance, and who is expected to possess the skills of the profession, whether a beginner or a veteran.

Our proposed amendments identified certain non-audit services that, when rendered to an audit client, impair auditor independence.

The Commission is aware of only those audit failures it discovers or that are made public; presumably there are more.

In fact, we have found the opposite to be true: As more fully discussed below, we are adopting rules, modified in response to almost 3, comment letters we received on our proposal, written and oral testimony from four days of public hearings about 35 hours of testimony from almost witnessesacademic studies, surveys and other professional literature.

AIMR reported that "[p]otential threats to auditor independence, resulting from audit firms providing non-audit services to their audit clients [were] troublesome to many. A comparative analysis of the independence requirements of eleven countries concluded, "With the possible exception of Switzerland, most of the countries stress both the appearance and the fact of independence.

We believe that independence will be protected and the rules will be more workable by focusing on those persons who can influence the audit, instead of all partners in an accounting firm. Why were independence issues a primary concern of Congress when they developed the Sarbanes-Oxley Act?

Recently, Earnscliffe found that most interviewees "felt that the evolution of accounting firms to multi-disciplinary business service consultancies represent[ed] a challenge to the ability of auditors to maintain the reality and the perception of independence.

Nearly half of all American households are invested in the stock market. We are skeptical about this claim. We have adopted other rules with a similar attentiveness to the need to sustain investor confidence in the public securities markets.

As many commenters noted, however, the issues presented by this rulemaking are not new, 30 and recent and accelerating changes in the accounting profession and in society have made resolution of these issues more pressing.

Investor confidence in the integrity of publicly available financial information is the cornerstone of our securities markets.FIN Final Exam - Free download as PDF File .pdf), Text File .txt) or read online for free.

FIN Final Exam. Study Flashcards On FIN Final Exam (Set 1) (Devry) at mint-body.com Quickly memorize the terms, phrases and much more.

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2 pages. Finance Coding DeVry University, Keller Graduate School of Management Finance FIN - Winter FIN - Spring DeVryTech-FinWeek_3_-_Project_1-Signature Assignment (2).docx. 4 pages. Final Rule: Revision of the Commission's Auditor Independence Requirements SECURITIES AND EXCHANGE COMMISSION 17 CFR Parts and [Release Nos.

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