University of Miami ACC 522 ACC 522/622 Spring 2018 Quiz 1Ultramares (Fred Stern & Co) Case 1)GAAS state that the auditor must be independent

University of Miami

ACC 522

ACC 522/622 Spring 2018

Quiz 1Ultramares (Fred Stern & Co) Case

1)GAAS state that the auditor must be independent. What condition in the Ultramares case likely impaired the auditor’s independence?

2. How did the auditor in the Ultramares case fail to exercise the appropriate degree of professional skepticism regarding the 17 sales invoices? Provide one example.

3. GAAS require the auditor to obtain sufficient appropriate evidence. Sufficient evidenced refers to the quantity of evidence. Why was the auditor’s sample of 200 sales invoices not sufficient?

4. Ultramares sued the auditor Touch Niven to recover losses incurred by relying on Fred Stern’s audited balance sheet. Ultramares was a

1. 1. Creditor
   2. Shareholder

5. The Ultramares case is a landmark case regarding the auditor’s liability to third parties for

1. 1. Ordinary negligence
   2. Fraud
   3. Both a and b
   4. Neither a or b