Question: When assessing audit risk, should auditors consider the type and number of third parties that may ultimately rely on the clients financial statements? Should auditors

When assessing audit risk, should auditors consider the type and number of third parties that may ultimately rely on the client’s financial statements? Should auditors insist that audit engagement letters identify the third parties to whom the client intends to distribute the audited financial statements? Would this practice eliminate auditors’ legal liability to nonprivity parties not mentioned in engagement letters?

Step by Step Solution

★★★★★

3.37 Rating (166 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Auditing standards do not specifically identify the type or number of thirdparty financial statement users as factors that an audit firm should consid... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

337-B-A-A-P (729).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

Auditors may be liable to third parties for fraud in several ways. Required: a. Identify auditors liability for fraud to third parties. b. Distinguish between fraud and constructive fraud. c. What is...

Should auditors insist that their clients accept all proposed audit adjustments, even those that have an immaterial effect on the given financial statements? Defend your answer.

Auditors consider financial statement assertions to identify appropriate audit procedures. For items a through f, match each assertion with the statement that most closely approximates its meaning....

VIEW THE STEP-BY-STEP SOLUTION TO: Title: ABC Appliance Inherent Risk and Control Design Assessment Prepare Inherent Risks and Control Design Assessment. This course project/case... I.Title: ABC...

Can you help with this? Case 2 - During August of 2010, the Virginia-based CPA firm of Abernethy and Chapman underwent a peer review of its quality control procedures and its quality control...

Mid Term Advanced Auditing- ACC504 1. What is the term used to identify the risk that the client's financial statements may be materially false and misleading? A. Business risk. B. Information risk....

QUESTION 1 Ballata Co is a manufacturer of footballs and is a new audit client for your firm. You are an audit supervisor of Spin & Co and are currently preparing for the forthcoming interim and...

In August 2004, an Internet-based investment advisory service included the com- mon stock of LocatePlus Holdings Corporation in its "Stocks to Watch"1 alert. The advisory service touted the New Age...

Discuss trade and competition in the Semiconductor Industry as defined by Laura Tyson in Who's Bashing Whom? How did the Japanese manage to gain market share at the expense of the United States and...

Based on these preliminary project estimates, what is the Net Present Value of the project? Calculate the project's Profitability Index, Internal Rate of Return and Payback period. Wholesome Foods...

Marsha Jones has bought a used Mercedes horse tramponter for ber Connecticat estate if cost $ 3 8 , 0 0 0 . The object is fo save on horse transporter rentak. Marsha had been renting a transporter...

What is the difference between pure risk and speculative risk? Give an example of each.

Describe what is meant by an audit procedure. Why is it important for audit procedures to be carefully worded?

Describe what is meant by an audit program for accounts receivable. What four things should be included in an audit program?

Explain why the auditor can be persuaded only with a reasonable level of assurance, rather than convinced, that the financial statements are correct.

What is source code? any software whose source code is made available free for any third party to review and modify contains instructions written by a programmer specifying the actions to be...

What is the firm's dividend payment in the current year? What is the firm's net income in the current year? Answer format: Number: Round to: 0 decimal places

Hi, please answer these questions it will be appreciated :) Thanks! Can you also please check my answers :) Consider the case of Badger Corp. Badger Corp. has 9% annual coupon bonds that are callable...