Exam (elaborations)

MODULE C MC EXAMINATION QUESTIONS WITH ALL CORRECT ANSWERS

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MODULE C MC

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MODULE C MC

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Uploaded on November 30, 2024
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Written in 2024/2025
Type Exam (elaborations)
Contains Questions & answers

module c mc
module c mc examination questions

Institution MODULE C MC
Course MODULE C MC

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MODULE C MC EXAMINATION
QUESTIONS WITH ALL CORRECT
ANSWERS
When accountants agree to perform a compilation or review of unaudited financial
statements, the best way to avoid client's misunderstanding the nature of the work is to
describe it completely in

the auditor's opinion

an engagement letter

a report to the client's board of directors at the close of the engagement

A management letter to the board of directors' audit committee - Answer-an
engagement letter

Entities desiring to issue equity or debt must provide a set of financial statements to any
prospective purchaser. This set of financial statements and other information for
prospective purchasers is known as a

Review

Patron's acquisition statemetn

projected audited financial information

prospectus - Answer-prospectus

The Securities Act of 1933 and Securities Exchange Act of 1934 contain

Civil liability provisions applicable to auditors

Criminal liability provisions applicable to auditors

Both a and b

Neither a nor b - Answer-Both a and b

Which of the following third parties is known by name to auditors as the audit is
conducted?

, General third party

Foreseen third party

Primary beneficiary

Foreseeable third party - Answer-Primary beneficiary

Which of the following would be the auditors' most likely defense in the action brought
under the Securities Exchange Act of 1934

the investor did not have a privity with auditors

the financial statements were not filed with the Securities and Exchange Commission

the investor did not suffer a loss based on the materially misstated financial statements

the auditors acted in good faith and were not aware of the materially misstated financial
statements - Answer-the financial statements were not filed with the Securities and
Exchange Commission

Which of the following statements regarding auditors' liability under the Securities Act of
1933 is not true?

Auditors may be liable if they are found to have engaged in ordinary negligence

Auditors' liability arises because of audited financial information filed with the SEC

Third parties must demonstrate that they relied on misstated financial statements that
were examined by auditors

the act related to the initial issuance of securities to the public, normally through an
initial public offering - Answer-Third parties must demonstrate that they relied on
misstated financial statements that were examined by auditors

Under the Securities Exchange Act of 1934, entities are required to report to the public
changing auditors on

Form 10-K
Form S-1
Form 10-Q
Form 8-K - Answer-Form 8-K

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MODULE C MC EXAMINATION QUESTIONS WITH ALL CORRECT ANSWERS

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