Question: Refer to the Auditing in Practice feature Documenting the Auditor s
Refer to the Auditing in Practice feature, “Documenting the Auditor’s Understanding of an Organization’s Internal Controls.” What should an auditor document with respect to the design of controls? Why is this documentation important?
Answer to relevant QuestionsWhat controls might an auditor test related to the valuation assertion for the sales account?TRUE-FALSE QUESTIONS1. Because management estimates are often subjective, the auditor does not need to test these estimates, but can rely solely on management’s work.2. When testing management estimates, the auditor should ...Discuss the relative reliability of internal and external documentation. Give two examples of each type of documentation.Assume that an auditor wishes to use analytical procedures as a substantive procedure. Indicate how substantive analytical procedures could be used in assisting the auditor in testing the following accounts:a. Interest ...Review Exhibit and identify audit procedures that an auditor might use for related-party transactions.
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