1-PwC's actions in their audits of Avon and Pinnacle were similar in that the SEC alleged that the firm:
Was influenced in their opinions by the size of nonaudit services
Owned stock in both clients
Borrowed money from both clients
Served on the board of directors of both clients
2-The KBC Solutions case deals with:
Whether the senior in charge of an audit pressures staff accountants to not increase the workload at year-end because of audit budget considerations
Whether the senior in charge of an audit can provide adequate explanations for the accounting for transactions being questioned by the review partner
Whether the controller should give in to the pressure and go along with false financial statements
Whether an audit firm should go along with the client's demands for accelerating the recording of revenue
3-During the investigations by the House Subcommittee on Oversight and Investigations, a question that was raised was:
Where were the auditors?
Why did the internal controls fail in so many frauds?
Why was fraud allowed to occur at some many companies?
Where was the board of directors in all these frauds?
4-An alternative practice structure can best be described as:
A form of ownership where a CPA firm owns a public company and audits that company
A form of structure where a public company provides nonattest services for a client that is also provided with attest services by an affiliate of the public company
A form of structure other than LLP and LLC
A form of structure where a CPA firm provides nonattest services for a client that is also provided with attest services by a public company