chap6 managements responsibilities

Question 1

The Sarbanes Oxley Act requires the CEO and CFO ti do what?

Answer 1

certify the quarterly and annual FSs submitted to the SEC

Question 2

what are 3 primary responsiblities that rest with management rather than with the auditors?

Answer 2

1. adopting sound accounting policies 2. maintaining adequate internal control 3. making fair representations in the FSs

Question 3

the annual report of many public companies include a statement about management’s responsiblilities and relationship with who?

Answer 3

the CPA firm

Question 4

Managements responsiblility for the integrity and fairness of the representations in the FSs carries with it the priviledge of what?

Answer 4

determining which presentations and disclosures it considers necessary

Question 5

if management insists on FS disclosure that the auditor finds unacceptable, what are the auditors options? (2)

Answer 5

1. issue an adverse or qualified opinion 2. withdraw from the engagement

Question 6

when the CFO and CEO sign the report of management , this is them certifying what?

Answer 6

that the FSs fully comply with the requirements of the Securities Exchange Act of 1934 and that the info contained in the FSs fairly presents, in all material respects, the financial condition and results of operations

Question 7

T/F Sarbanes Oxley Act provides for criminal penalties for anyone who knowingly flasely certifies FSs

Answer 7

T