Chapter 7 (Auditing)
SOX Title II prevents a registered public accounting firm from performing an audit if a person employed at the client in a significant accounting position was previously employed at the registered public accounting firm and engaged on that audit. How long must the firm wait prior to being allowed to conduct the audit? 1 year 3 years 5 years 2 years
1 year
As set forth by Title I of the Sarbanes-Oxley Act of 2002, Section 102, "Registration with the Board," public accounting firms performing audits for issuers must register with the PCAOB. The registration includes: a statement of the firm's quality control policies. a list of the names and license numbers of all accountants associated with the firm. information regarding criminal, civil, or administrative actions or disciplinary proceedings against the firm (or any person in the firm). All of the answer choices are correct.
All of the answer choices are correct.
The PCAOB has the authority to enforce SOX Title III, Section 303, in which type of proceedings? Criminal Civil Regulatory The PCAOB has no authority to enforce rules and regulations.
Civil
Section 404 of the Sarbanes-Oxley Act of 2002 requires each annual report of an issuer to include which of the following? Representations from the company's external auditors that the company has effective internal control over operations Management representations that the company's external auditors have examined its internal control over compliance with laws and regulations Reasonable assurances that fraud will be identified before the issuance of the company's annual report Management's assessment of the effectiveness of internal control over financial reporting
Management's assessment of the effectiveness of internal control over financial reporting
Which of the following bodies promulgates standards for audits of issuers (publicly traded companies)? Securities and Exchange Commission (SEC) Auditing Standards Board (ASB) American Institute of Certified Public Accountants (AICPA) Public Company Accounting Oversight Board (PCAOB)
Public Company Accounting Oversight Board (PCAOB)
According to the PCAOB, which of the following tax services may be provided jointly with the audit of an issuer's financial statements without impairing independence? Planning and issuing an opinion in favor of the tax treatment of an aggressive tax position Reviewing a proposed transaction and informing the client of the tax consequences Providing consultations under a contingency fee arrangement Preparing tax returns for an individual in a financial oversight reporting role during the audit period
Reviewing a proposed transaction and informing the client of the tax consequences
An accountant can perform, with preapproval of the audit committee of the board of directors, which of the following nonaudit services during the audit of an issuer? Bookkeeping services Human resource services Tax planning services Internal audit outsourcing services
Tax planning services
According to the Sarbanes-Oxley Act of 2002, which of the following nonaudit services can be provided by a registered public accounting firm to the client contemporaneously with the audit when preapproval is granted by audit committee action? Internal audit outsourcing services Tax services Actuarial services related to the audit Advice on financial information system design
Tax services
An issuer's auditor is prohibited from providing tax services to which of the following individuals? The chair of the board of directors The chair of the audit committee The CEO The CFO of an affiliate of the issuer audited by another firm
The CEO
Which of the following best describes the effect of a contingent fee arrangement on the auditor's independence? The contingent fee arrangement does not impair independence if it is consistent with the registered public accounting firm's quality control policies. The contingent fee arrangement impairs independence. The contingent fee arrangement does not impair independence unless more than half of the fee is subject to contingencies. The contingent fee arrangement impairs independence unless approved by the client's audit committee.
The contingent fee arrangement impairs independence.
When a former partner of a registered public accounting firm who left the firm two years ago accepts a financial reporting oversight role at an issuer audit client, the independence of the registered public accounting firm is considered impaired unless which of the following is true? The former partner discloses the relationship to the issuer audit client's board of directors. The former partner was employed by the registered public accounting firm for a period of two years or less. The former partner has no remaining capital balance in the registered public accounting firm. The former partner exerts only limited influence over the registered public accounting firm's operations and financial policies.
The former partner has no remaining capital balance in the registered public accounting firm.
Which of the following statements is correct regarding disclosure of client working papers prepared by a CPA? Working papers may not be transferred to another accountant without the client's permission. Working papers may not be turned over to a CPA quality review team without the client's permission. Working papers may not be disclosed under a federal court subpoena without the client's permission. Working papers may not be disclosed to any third parties without the client's permission.
Working papers may not be transferred to another accountant without the client's permission.
According to the SEC, members of an issuer's audit committee may not: establish procedures for employees to anonymously report fraud. be responsible for the compensation of any registered public accounting firm employed by the registrant to provide an audit report. accept any consulting, advisory, or other compensatory fee from the registrant for services other than as a member of the board. engage independent counsel as deemed necessary to carry out their duties.
accept any consulting, advisory, or other compensatory fee from the registrant for services other than as a member of the board.
Section 403 of SOX Title IV, "Disclosures of Transactions Involving Management and Principal Stockholders," dictates that: it is unlawful for any issuer to extend or maintain credit in the form of a personal loan to or for any director or executive officer of that issuer. any person who is directly or indirectly the beneficial owner of more than 10% of any class of any equity security or is a director or an officer of the issuer must file statements required by SOX and the SEC. each annual report filed with the SEC contain an internal control report. each issuer disclose whether or not they have adopted a code of ethics for senior financial officers.
any person who is directly or indirectly the beneficial owner of more than 10% of any class of any equity security or is a director or an officer of the issuer must file statements required by SOX and the SEC.
The specific functions of an audit committee include all of the following except: selecting and appointing the independent auditor. assuring that the auditor is independent. approving the audit methodology to be used by the auditor. reviewing the scope of the audit.
approving the audit methodology to be used by the auditor.
In order to participate on the PCAOB Board, members must: be registered CPAs. demonstrate commitment to the interests of investors and the public. have no current, or past, affiliation with a public accounting firm. have formerly served on the SEC.
demonstrate commitment to the interests of investors and the public
An auditor may provide an issuer client any of the following nonaudit services without impairing independence and without obtaining the preapproval of the audit committee, except: nonaudit services with revenues in aggregate of less than 5% of the total revenues paid by the issuer to the auditor during the fiscal year in which the nonaudit services are provided. nonaudit services that were promptly brought to the attention of, and approved by, the audit committee prior to the completion of the audit. nonaudit services to perform financial information systems design and implementation. services that the issuer did not recognize as nonaudit services at the time of the engagement.
nonaudit services to perform financial information systems design and implementation.
A cooling-off period of how many years is required before a member of an issuer's audit engagement team may begin working for the registrant in a key position? one year two years three years five years
one year
According to SEC regulations, each of the following nonaudit services will impair an auditor's independence, except: designing a management information system that aggregates source data underlying the financial statements. performing an internal audit function. preparing the audit client's financial statements that are filed with the SEC. preparing the audit client's tax return.
preparing the audit client's tax return.
Section 102 of SOX Title I, "Registration with the Board," dictates that: public accounting firms performing audits on issuers must register with the PCAOB. the PCAOB has the authority to set, amend, update, and modify auditing, quality control, and ethics standards. the PCAOB has the mandate and authority to conduct compliance inspections of each registered public accounting firm. the PCAOB may investigate any act or practice, or omission to act, by a registered public accounting firm that may violate any provision of the Sarbanes-Oxley Act, PCAOB rules, securities laws, and professional standards.
public accounting firms performing audits on issuers must register with the PCAOB.
Section 408 of SOX Title IV, "Enhanced Review of Periodic Disclosures by Issuers," dictates that: each issuer disclose whether or not the audit committee is comprised of at least one member who is a financial expert. the SEC will review disclosures made by issuers. issuers disclose to the public on a rapid and current basis any additional information concerning material changes in the financial condition or operations. each issuer disclose whether or not they have adopted a code of ethics for senior financial officers.
the SEC will review disclosures made by issuers.
According to the Sarbanes-Oxley Act of 2002, what is the maximum number of years an audit partner can perform audit services for an issuer before the auditor rotation is required? 2 years 3 years 4 years 5 years
5 years
According to the Sarbanes-Oxley Act of 2002, what is the maximum number of years an audit partner can perform audit services for an issuer before the auditor rotation is required? 3 years. 2 years. 4 years. 5 years.
5 years
As set forth by Title I of the Sarbanes-Oxley Act of 2002, Section 105, "Investigations and Disciplinary Proceeding," the PCAOB may investigate any act or practice, or omission to act, by a registered public accounting firm that may violate any provision of the Sarbanes-Oxley Act, PCAOB rules, securities laws, and professional standards. Possible disciplinary actions include: temporary suspension or permanent revocation of registration. civil monetary penalties. requiring additional professional education or training. All of the answer choices are correct.
All of the answer choices are correct.
For the purpose of Title IV of the Sarbanes-Oxley Act of 2002, Section 406, "Code of Ethics for Senior Financial Officers," the code of ethics should promote: honest and ethical conduct. full, fair, accurate, timely, and understandable disclosures. compliance with applicable governmental rules and regulations. All of the answer choices are correct.
All of the answer choices are correct.
For the purpose of Title IV of the Sarbanes-Oxley Act of 2002, Section 407, "Disclosures of Audit Committee Financial Experts," a financial expert is defined as a person who: has an understanding of GAAP and financial statements. is experienced in the preparation or auditing of financial statements. is experienced with internal accounting controls. All of the answer choices are correct.
All of the answer choices are correct.
Persons associated with a registered public accounting firm shall not take or omit to take an action knowing, or recklessly not knowing, that would violate the: rules of the PCAOB. provisions of the securities laws. professional standards. All of the answer choices are correct.
All of the answer choices are correct.
Prior to seeking approval of certain tax services from the audit committee, a registered public accounting firm must: describe in writing, to the audit committee, the scope of service and fee structure. discuss with the audit committee the potential effects of the services on independence of the firm. document the substance of the discussion with the audit committee. All of the answer choices are correct.
All of the answer choices are correct.
SOX Title II amends section 10A of the Securities Exchange Act of 1934 by requiring registered public accounting firms to report to the audit committee which of the following? All critical accounting policies and practices All alternative accounting treatments within GAAP that have been discussed with management All material written communications between the accounting firm and management All of the answer choices are correct.
All of the answer choices are correct.
Based on Rule 3521 of the PCAOB, in order for registered public accounting firms to maintain independence, they can only accept contingent fees or commission: if they are approved by the audit committee. if they are approved by the PCAOB. if they are disclosed as a nonaudit fee. Contingent fees and commissions are currently not allowed.
Contingent fees and commissions are currently not allowed.
Each of the following is a required attribute of an issuer's audit committee financial expert, except: the ability to assess the application of accounting principles in connection with estimates, accruals, and reserves. significant audit experience as a certified public accountant. an understanding of internal controls related to financial reporting. an understanding of generally accepted accounting principles.
significant audit experience as a certified public accountant.
Any officer or director of an issuer is strictly prohibited from: investing in stock or in stock options of the issuer. owning more than 10% of the issuer's stock. taking any action to fraudulently influence the registered public accounting firm or any of its members. All of the answer choices are correct.
taking any action to fraudulently influence the registered public accounting firm or any of its members.
Title II of the Sarbanes-Oxley Act prohibits registered public accounting firms from providing certain nonaudit services. These services include all of the following except: tax preparation services. financial information systems design and implementation. internal auditing outsourcing services. legal services and expert services unrelated to the audit.
tax preparation services.
Section 103 of SOX Title I, "Auditing, Quality Control, and Independence Standards and Rules," dictates that: public accounting firms performing audits on issuers must register with the PCAOB. the PCAOB has the authority to set, amend, update, and modify auditing, quality control, and ethics standards. the PCAOB has the mandate and authority to conduct compliance inspections of each registered public accounting firm. the PCAOB may investigate any act or practice, or omission to act, by a registered public accounting firm that may violate any provision of the Sarbanes-Oxley Act, PCAOB rules, securities laws, and professional standards.
the PCAOB has the authority to set, amend, update, and modify auditing, quality control, and ethics standards.
Section 104 of SOX Title I, "Inspections of Registered Public Accounting Firms," dictates that: public accounting firms performing audits on issuers must register with the PCAOB. the PCAOB has the authority to set, amend, update, and modify auditing, quality control, and ethics standards. the PCAOB has the mandate and authority to conduct compliance inspections of each registered public accounting firm. the PCAOB may investigate any act or practice, or omission to act, by a registered public accounting firm that may violate any provision of the Sarbanes-Oxley Act, PCAOB rules, securities laws, and professional standards.
the PCAOB has the mandate and authority to conduct compliance inspections of each registered public accounting firm.
Rules issued under the Sarbanes-Oxley Act of 2002 restrict former members of an audit engagement team from accepting employment as a chief executive, chief financial or chief accounting officer, or controller of an audit client that files reports with the Securities and Exchange Commission. How many annual audit periods must be completed before such employment can be accepted? One Two Three Five
One
Prior to rules of the PCAOB becoming effective, they must be approved by the: AICPA. IASB. SEC. Congress.
SEC.
The Public Company Accounting Oversight Board was established by which of the following? The Financial Accounting Standards Board The American Institute of Certified Public Accountants The Sarbanes-Oxley Act of 2002 The International Accounting Standards Board
The Sarbanes-Oxley Act of 2002
One of the requirements of SOX (Title II) is that the lead audit partner must rotate out every: three years. five years. six years. The rotation period is at the discretion of the accounting firm.
five years.
With respect to Auditing Standards and Ethics and Independence Rules, the PCAOB: has adopted its own rules. relies on guidance of the AICPA. relies on guidance of the AICPA and its state societies. has yet to make any rules
has adopted its own rules.
Under the liability provisions of Section 11 of the Securities Act of 1933, a CPA who certifies financial statements included in a registration statement generally will not be liable to a purchaser of the security: unless the purchaser can prove scienter on the part of the CPA. unless the purchaser can prove privity with the CPA. if the CPA can prove due diligence. if the financial statements were materially misstated.
if the CPA can prove due diligence.
For public accounting firms to issue or participate in the issuance of any report of an issuer, they must comply with all of the following requirements except: register with the PCAOB. sign a consent statement accepting their responsibilities to the Board. comply with any request for testimony or production of documents. ignore any other professional guidance in conflict with the directive of the Board.
ignore any other professional guidance in conflict with the directive of the Board.
The Securities Act of 1933: created the Securities and Exchange Commission. requires investors to take responsibility for registration accuracy. requires public accounting firms to register with the SEC. is concerned with preventing fraud in securities sales.
is concerned with preventing fraud in securities sales.
Section 409 of SOX Title IV, "Real Time Issuer Disclosures," dictates that: each issuer disclose whether or not the audit committee is comprised of at least one member who is a financial expert. the SEC will review disclosures made by issuers. issuers disclose to the public on a rapid and current basis any additional information concerning material changes in the financial condition or operations. each issuer disclose whether or not they have adopted a code of ethics for senior financial officers.
issuers disclose to the public on a rapid and current basis any additional information concerning material changes in the financial condition or operations.
Section 402 of SOX Title IV, "Enhanced Conflict of Interest Provisions," dictates that: it is unlawful for any issuer to extend or maintain credit in the form of a personal loan to or for any director or executive officer of that issuer. any person who is directly or indirectly the beneficial owner of more than 10% of any class of any equity security or is a director or an officer of the issuer must file statements required by SOX and the SEC. each annual report filed with the SEC must contain an internal control report. each issuer must disclose whether or not they have adopted a code of ethics for senior financial officers.
it is unlawful for any issuer to extend or maintain credit in the form of a personal loan to or for any director or executive officer of that issuer.
According to the Sarbanes-Oxley Act of 2002, the PCAOB has the legal authority to perform each of the following, except: prosecute suspected criminal violations by registered public accounting firms. process, review, and approve the registration of public accounting firms that audit issuers. inspect and review selected audit engagements of registered public accounting firms. establish auditing, quality control, and independence standards for audits of issuers.
prosecute suspected criminal violations by registered public accounting firms.
The primary purpose of the Sarbanes-Oxley Act is to: remove the impact of the private sector on the development of generally accepted accounting principles. protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws. create additional jobs for accountants through additional regulatory requirements for public companies (issuers). increase the cost of registration for public companies.
protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws.
A person identified as an audit committee financial expert of an issuer generally must have acquired the attributes of a financial expert through any of the following experiences except: as a principal financial officer, principal accounting officer, controller, public accountant, or auditor. serving on at least one other issuer's audit committee or disclosure committee of the board of directors. actively supervising a principal financial officer or principal accounting officer. assessing the performance of public accountants with respect to preparation, auditing, or evaluation of financial statements.
serving on at least one other issuer's audit committee or disclosure committee of the board of directors.
Section 11(A) of the Securities Act of 1933: shifts the burden of proof in a lawsuit from the investor to the CPA who audited the financial statements. requires that the CPA be proven to have committed fraud in a lawsuit brought by an investor. protects the CPA who audits the financial statements of a registrant if the CPA follows section 11(A) to the letter. removes the discussion of materiality from any lawsuits brought by an investor against a CPA.
shifts the burden of proof in a lawsuit from the investor to the CPA who audited the financial statements.
Prior to seeking approval of nonaudit services related to internal control from the audit committee, a registered public accounting firm must do all of the following except: describe in writing, to the audit committee, the scope of service. document the expected results of the nonaudit services. discuss with the audit committee the potential effects of the services on independence of the firm. document the substance of the discussion with the audit committee
document the expected results of the nonaudit services.
Section 407 of SOX Title IV, "Disclosures of Audit Committee Financial Expert," dictates that: each issuer disclose whether or not the audit committee is comprised of at least one member who is a financial expert. the SEC will review disclosures made by issuers. issuers disclose to the public on a rapid and current basis any additional information concerning material changes in the financial condition or operations. each issuer disclose whether or not they have adopted a code of ethics for senior financial officers.
each issuer disclose whether or not the audit committee is comprised of at least one member who is a financial expert.
Section 406 of SOX Title IV, "Code of Ethics for Senior Financial Officers," dictates that: it is unlawful for any issuer to extend or maintain credit in the form of a personal loan to or for any director or executive officer of that issuer. any person who is directly or indirectly the beneficial owner of more than 10% of any class of any equity security or is a director or an officer of the issuer must file statements required by SOX and the SEC. each annual report filed with the SEC contain an internal control report. each issuer disclose whether or not they have adopted a code of ethics for senior financial officers.
each issuer disclose whether or not they have adopted a code of ethics for senior financial officers.
Title IV of the Sarbanes-Oxley Act of 2002 requires which of the following? That financial statements reflect all material correcting adjustments identified by the registered public accounting firm That financial statements reflect all material off-balance sheet transactions, arrangements, obligations, and other relationships That pro forma information, if included, does not contain any untrue statements or omission of material facts All of the answer choices are correct.
All of the answer choices are correct.
Registered public accounting firms will lose independence of its audit clients if they perform tax services for persons in financial accounting oversight roles unless: the person is only in the oversight role because they serve on the board of directors. the person's relationship to the audit client is through an affiliate, and the financial statements of the affiliate are not material to the consolidated financial statements. the person in the financial accounting role is not in that role prior to a hiring, promotion, or change in employment event. All of the answer choices are exceptions that would not impair independence.
All of the answer choices are exceptions that would not impair independence.
Responsibilities of the PCAOB include all of the following except: to register public accounting firms. to establish or adopt standards relating to the preparation of audit reports for issuers. to conduct inspections of registered public accounting firms. All of the items listed are responsibilities of the PCAOB.
All of the items listed are responsibilities of the PCAOB.
Section 404 of SOX Title IV, "Management Assessment of Internal Controls," dictates which of the following? It is unlawful for any issuer to extend or maintain credit in the form of a personal loan to or for any director or executive officer of that issuer. Any person who is directly or indirectly the beneficial owner of more than 10% of any class of any equity security or is a director or an officer of the issuer must file statements required by SOX and the SEC. Each annual report filed with the SEC must contain an internal control report.
Each annual report filed with the SEC must contain an internal control report.
Which of the following terms best describes the relationship between a corporation and the CPA it hires to audit corporate books? Employer and employee Employer and independent contractor Master and servant Employer and principal
Employer and independent contractor
At least how often should the PCAOB inspect a registered public accounting firm that regularly issues audit reports to 50 issuers? Annually Every two years Every three years As requested by the firm
Every three years
Which of the following is a correct statement regarding the nature and timing of communications between an accounting firm performing an initial audit of an issuer and the issuer's audit committee? Prior to accepting the engagement, the firm must orally affirm its independence to the audit committee with all members present. The firm must address all independence impairment issues on the date of the audit opinion. Communications related to independence may occur in any form prior to issuance of the financial statements. Prior to accepting the engagement, the firm should describe in writing all relationships that, as of the date of the communication, may reasonably be thought to bear on independence.
Prior to accepting the engagement, the firm should describe in writing all relationships that, as of the date of the communication, may reasonably be thought to bear on independence.
The AICPA Council, under Rule 201 and 202 of the Code of Conduct, has given the PCAOB authority to promulgate auditing and related attestation standards, quality control, ethics, independence, and other standards related to which of the following parties? All companies requiring an audit of their financial statements Private companies Public companies (issuers) Governmental agencies
Public companies (issuers)
PCAOB Rule 3522 regarding tax transactions prevents which of the following nonaudit tax services? Original, or amended, federal returns Services related to state and local returns Services related to marketing, planning, or opining in favor of the tax treatment of a transaction All tax services are prevented by the PCAOB.
Services related to marketing, planning, or opining in favor of the tax treatment of a transaction
An issuer may hire an employee of a registered public accounting firm who served on the audit engagement team within the previous year for which of the following positions? Controller CFO CEO Staff accountant
Staff accountant
During an audit of the financial statements of a company, the CFO provides a spreadsheet to the audit team that contains a number of errors that are material to the financial statements. Under what circumstances would this situation be a violation of the rules of the Sarbanes-Oxley Act of 2002 on improper influence on the conduct of audits? The CFO discovers and corrects most of the errors in the spreadsheet, which was prepared by a staff accountant. One immaterial error remains of which the CFO is aware, and this error remains undetected by the audit team, but the financial statements end up being fairly presented. The audit team discovers the errors through alternate procedures when they discern that the spreadsheet was improperly manipulated by the CFO. This intentional conduct of the CFO does not succeed in affecting the audit. The CFO had the spreadsheet prepared by a vendor of the company; the vendor intentionally misstates information in the spreadsheet, and the CFO does not discover the misstatements. The errors remain undetected by the audit team, and the financial statements are materially misleading. The CFO was unaware of the errors in the spreadsheet, which was prepared by a staff accountant and reviewed by the CFO. The errors remain undetected by the audit team, and the financial statements are materially misleading.
The audit team discovers the errors through alternate procedures when they discern that the spreadsheet was improperly manipulated by the CFO. This intentional conduct of the CFO does not succeed in affecting the audit.
A registered public accounting firm is conducting an audit of an issuer and initiated its current-year audit on January 1, year 3. Many of the firm's former auditors are now employed by the client. Under which of the following circumstances may the firm perform the audit? The client's CFO was the lead partner on the audit until December 31, year 1. The client's CEO was a manager on the audit until June 30, year 2. The client's controller was a staff accountant on the audit for two weeks during year 2. The client's chief accounting officer was the concurring partner on the audit until April 15, year 2.
The client's CFO was the lead partner on the audit until December 31, year 1.
Which of the following actions would violate Title III, Section 303, of the Sarbanes-Oxley Act? The auditor of an issuer company provided assistance to the company a year ago with their new accounting software package. The head of internal audit at an issuer company worked for the public accounting firm that is now performing their audit. She left the firm 13 months ago. The audit committee approved a nonaudit service (tax return preparation) by the auditor, but this approval was not disclosed to investors. The payroll clerk of an issuer company did not answer questions about fraud truthfully during an interview with the auditor, at the instruction of the CFO.
The payroll clerk of an issuer company did not answer questions about fraud truthfully during an interview with the auditor, at the instruction of the CFO.
A registered public accounting firm must make representations to the audit committee: prior to accepting the initial engagement. at least annually. at least annually and prior to accepting the initial engagement. It is not required that a registered public accounting firm make explicit representations to the audit committee regarding independence.
at least annually and prior to accepting the initial engagement.
To ensure that the audit report for an issuer is prepared in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, the report must: be prepared within 60 days of the end of the issuer's fiscal year end unless extenuating circumstances, as outlined in the act, are publicly disclosed. attest to and report on the internal control assessment made by the management of the issuer. be prepared within 60 days of the issuer's fiscal year end, be certified by the Public Company Accounting Oversight Board, and be publicly disclosed. attest to, and report on, the efficiency and effectiveness of the issuer's system of internal control.
attest to and report on the internal control assessment made by the management of the issuer.
Section 105 of SOX Title I, "Investigations and Disciplinary Proceedings," dictates that: public accounting firms performing audits on issuers must register with the PCAOB. the PCAOB has the authority to set, amend, update, and modify auditing, quality control, and ethics standards. the PCAOB has the mandate and authority to conduct compliance inspections of each registered public accounting firm. the PCAOB may investigate any act or practice, or omission to act, by a registered public accounting firm that may violate any provision of the Sarbanes-Oxley Act, PCAOB rules, securities laws, and professional standards.
the PCAOB may investigate any act or practice, or omission to act, by a registered public accounting firm that may violate any provision of the Sarbanes-Oxley Act, PCAOB rules, securities laws, and professional standards.
Each of the following broker-dealer relationships impairs auditor independence with respect to a broker-dealer issuer audit client, except: the auditor has a brokerage account that holds both U.S. securities and assets other than cash or securities. the auditor has a brokerage account that holds U.S. securities in excess of Securities Investor Protection Corporation coverage limits. the auditor has a brokerage account that includes assets other than cash or securities. the auditor has a cash balance in a brokerage account that is fully covered by the Securities Investor Protection Corporation.
the auditor has a cash balance in a brokerage account that is fully covered by the Securities Investor Protection Corporation.
If a registered public accounting firm is in violation of any rule or regulation of the SEC or PCAOB: they are required to remedy all violations within 120 days. they may not prepare or issue any audit report with respect to that issuer. depending on the violation, they may continue the engagement. Violations of the SEC or PCAOB rules do not prevent firms from associating with clients (issuers).
they may not prepare or issue any audit report with respect to that issuer.