AC 410 All Assignments AC 410 All Assignments | Page 2

years, has confidence in the management of the company, and makes a
quick review of the current year’s financial statements, a qualified
report may be issued.”
Do you agree? Give reasons to support your answer.
2–28
Reed, CPA, accepted an engagement to audit the financial statements
of Smith Company. Reed’s discussions with Smith’s new management
and the predecessor auditor indicated the possibility that Smith’s
financial statements may be misstated due to the possible occurrence
of errors, fraud, and illegal acts.
a. Identify and describe Reed’s responsibilities to detect Smith’s errors
and fraud. Do not identify specific audit procedures.
b. Describe Reed’s responsibilities to detect Smith’s material
noncompliance with laws. Do not identify specific audit procedures.
c. Identify and describe Reed’s responsibilities to report Smith’s
noncompliance with laws.
AC 410 Unit 10 Assignment
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