In early 1994, E&Y officials discovered that the CBI auditors had failed to determine the true nature of the “advances” they had uncovered during the 1992 and 1993 audits. In your view, did E&Y have an obligation to inform CBI management of this oversight prior to seeking the “reaudit” engagement? More generally, does an auditor have a responsibility to inform client management of mistakes or oversights made on earlier audits?
Answer to relevant QuestionsUnder what circumstances, if any, should an audit engagement partner acquiesce to a client’s request to remove a member of the audit engagement team?Under what circumstances, if any, are auditors required to assess the going-concern status of an audit client? What procedures should auditors apply when performing such an assessment?U.S. auditing standards identify the principal “management assertions” that underlie a set of financial statements. What management assertions were particularly relevant to? (a) The “sales” of working interests ...Identify the key audit objectives for a client’s payroll function. Comment on objectives related to tests of controls and substantive audit procedures.Prepare a list of internal control procedures that banks and other financial institutions have implemented, or should implement, for their ATM operations.
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