Compare the primary auditor objectives in auditing historical financial statements

(1)
Auditor’s
Role and Responsibilities
Please respond to the following:

Compare the primary auditor
objectives in auditing historical financial statements to auditing
internal controls over financial reporting. Identify at least two (2)
objectives that are the most significant in reducing the risk of reporting
errors or misstatements in financial statements. Provide a rationale for
your response.
Create a scenario where it would
be acceptable for an external auditor to accept an audit engagement
without having knowledge of a client’s business environment. Ascertain the
key legal ramifications and risk mitigation strategies associated with an
auditor performing the audit. Support your position.

(2)
Auditor
Accountability
Please respond to the following:
e-Activity:Use the Internet to
research a publically-traded company that received an unqualified audit report
from external auditors and faced accusations of reporting false or misleading
accounting information.

From the e-Activity, discuss the
departures from generally accepted accounting principles (GAAP) that you
have researched, and give your opinion as to whether or not the Public
Company Accounting Oversight Board (PCAOB) should levy sanctions against
the CPA firm for issuing the unqualified report. Identify the sanctions
and section of the report the company should have modified to address
departures from GAAP. Support your position.
Compare the code of professional
conduct for CPAs to the code of professional conduct for accountants who
are non-CPAs. Determine the major ethical issues created by the mergers of
public accounting firms with non-CPA firms that perform accounting
services. Explain your rationale.

(3)
Audit
Risks Please respond to
the following:
e-Activity:Use the Internet or visit
the Securities and Exchange Website, located at.sec.gov/”>http://www.sec.gov/, to research at least two (2) sanctions
levied against companies that have violated general accounting principles.

From the e-Activity, analyze
whether or not investors who were misled by relying on financial
statements could hold the audit firm liable for audit failure either by
common or securities laws. Provide a rationale for your response.
According to an article in the CPA
Journal, the accounting profession has long contended that an audit
conducted in accordance with generally accepted auditing standards (GAAS)
provides reasonable assurance that there are no material misstatements
contained within financial statements. Suggest at least two (2) alternative
methods that auditors can use to provide a more concrete level of
assurance to investors. Provide support for your responses with examples
of such methods in use.