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WorksheetsAudit & Investigation: Topic 2
Total questions: 10
Worksheet time: 6mins
Following are the factors that lead to increase in litigation, EXCEPT:
Pressure to reduce audit time
Software not update
User expectation gap
audit become more complex
Select act done by auditor that can be considered as breach on contract.
Fail to discover material error
Wtihdraw from engagement without justification
Going vacation with client
Violating client confidentiality
How many conditions need to be fulfil to charge auditor under law of tort?
3
2
5
10
Law of (a) is also know as common law
How many third party user group identified by a court?
3
2
6
4
Auditor can defense themselves under common law by:
Assign intership student to do the audit work by himself
Applying the most up-to date accounting and auditing standards
Adhering to all standards of ethical behaviour laid down by the relevant professional bodies
Employing competent staff who are adequately trained and supervised in carrying out their duties.
Following are the sanctions to auditor under US statutory law, EXCEPT:
Penalties up to USD 50,000 per violation
Require continuing education of firm personnel
Permanently revoking the firm’s registration with the Public Company Accounting Oversight Board
Temporary suspend the audit firm from doing any activities
In Malaysia, legal action may be bought against auditor for violation Companies Act_______
2014
2016
1998
1997
There are other actions that firms can take to ensure quality and minimize liability exposure including:
Issuing engagement letter
Making appropriate client acceptance/continuance decisions
Prohibit periodic rotation of audit engagement partner
Evaluating the audit firm’s limitations
Section 167 under Companies Act 2016, provides civil liability for misstatement in________
comprehensive income
financial position
cash flow
prospectus
