Professional Standards Case
Use the AICPA Professional Standards to answer each of the following questions. Please cite the section of the professional standards where you found your answer. You may not cite other sources (e.g. a text book or other on-line sources). This must be completed on an individual basis and will be worth 25 points (5 points per question below.) Please type your solutions and upload the completed file to D2L in the appropriate dropbox.1. What topic does AU-C §315.33 address?
2. Michael Smithson, Michelle Roberts, and Chris Cooper all received their MAcc degrees from MTSU. All three worked for large, international CPA firms before they came together to create their own CPA firm call “Smithson, Roberts and Cooper, LLP.” After practicing for about ten years, Michael Smithson was tragically killed in an automobile accident. Michelle Roberts and Chris Cooper plan to continue operating the CPA firm, but they are uncertain whether they must remove “Smithson” from the name of the CPA firm since Mr. Smithson is no longer working at the firm. Is it permissible to keep “Smithson” in the name of the firm? (Refer to the Code of Professional Conduct)
3. You are auditing the accounts receivable of Raider Manufacturing, Inc., a private company. You selected 40 accounts that you plan to confirm using positive confirmations. When you presented the list to the client, they asked you to specifically not confirm three of these accounts. What should you do?
4. You were recently reading an article in the Journal of Accountancy about audit sampling, and the article keeps referring to the ‘sampling unit.’ You want to know what this term means so you start searching the professional standards. What is the formal definition of this term? (Use the clarified auditing standards to find your answer.)
5. Smith Brothers Distributing, Inc., a private company, requested that your firm perform a compilation of their financial statements. You agreed to perform the engagement, but now you have substantial doubt about their ability to continue as a going concern for a reasonable period of time. What are your responsibilities? (Use the Accounting and Review Standards (AR) to answer this question.)