[Anonymous]

Hi guys, can you help me out here on understanding?

I was looking at Wiley multiple choice questions and I have two questions

Question 1

The Sarbanes-Oxley Act of 2002 prohibits the performance of certain services for audit clients by auditors of public companies. Which of the following is not prohibited

a Management functions

b Tax preparation services (Correct answer)

c Bookkeeping services

d Appraisal services

Question 2

The AICPA allows an auditor to perform which of the following services for an audit client?

a Authorization of transactions for the client.

b Performance of bookkeeping services for the client. (Correct Answer)

c Preparation of client source documents

d Preparation and posting of journal entries without the client’s approval.

Does AICPA standard apply only to non-public companies?

[Anonymous]

For Question 1, it's worded wrong or something. All of the choices are prohibited except for tax services. Tax services are allowed under SOX, none of the others are.

For Question 2, bookkeeping services are allowed as long as the auditor is only using the client documents and not influencing anything. There really is not a correct answer listed in question 2, but you could stretch the bookkeeping one as long as the auditor is only preparing the financial statements for the client without adding or influencing or authorizing anything.

[Anonymous]

For Question 1, it's worded wrong or something. All of the choices are prohibited except for tax services. Tax services are allowed under SOX, none of the others are.

For Question 2, bookkeeping services are allowed as long as the auditor is only using the client documents and not influencing anything. There really is not a correct answer listed in question 2, but you could stretch the bookkeeping one as long as the auditor is only preparing the financial statements for the client without adding or influencing or authorizing anything.

[Anonymous]

Yeah you were right I worded it wrong, left out “not” prohibited.

[Anonymous]

Yeah you were right I worded it wrong, left out “not” prohibited.

[Author]

Replies