All Matches

Solution Library

Expert Answer

Textbooks

Search Textbook questions, tutors and Books

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Tutors
Study Help
Ask a Question

Search
Sign In
Register

study help
business
principles of auditing

Questions and Answers of Principles of Auditing

All administrative and professional staff in a corporate legal department prepare documents on terminals connected to a network file server. The best control over unauthorized access to sensitive
Re-Tool Corporation, one of the firm’s larger audit clients, has a data processing staff of approximately 75 individuals. Past audits have indicated that the general control environment is
You have been assigned to the audit of Mid-State Electronics Corporation, a medium-size distributor of electronics equipment serving a geographic area within a radius of 150 miles. MidState has
Auditors are justifiably concerned that the movement to EDI will result in potential new risks to audit clients. Two of these new risks, described in the chapter, are economic interdependence and
The auditor should evaluate the ability of an organization to continue to operate should the data processing center be destroyed.Most organizations have reacted to the risk by developing
Explain how the auditor’s assessment of management integrity and competence, the client’s business environment, and the auditor’s knowledge of the reliability of the client’s information
Conceptually, is it possible to complete an audit by (1) understanding the client and the industry and (2) assessing environment risk? Is such an approach acceptable according to auditing standards?
What is testimonial evidence? Identify the types of testimonial evidence the auditor obtains during an audit. For each type listed, identify the factors that affect its perceived reliability and
The third standard of fieldwork requires the auditor to gather sufficient competent evidential matter to afford a reasonable basis for an opinion regarding the financial statements. Explain how the
Distinguish between internal and external documentation as a form of audit evidence. Give two examples of each.
Johnson Company is a medium-size manufacturing client that has expanded its operations over the past few years by acquiring smaller companies that had complementary products or that manufactured
Ten major types of audit procedures are identified as part of the audit evidence-gathering process. These procedures are Observation Physical examination Examination of documents Inquiry of company
During the investigation of the Building and Land accounts, the internal auditor notices that one of the buildings was sold last year for a very large profit as authorized by the board of directors.
A major development of computer processing is referred to as image processing. It is the process of making copies of paper documents and storing them in computerized form.Required:Review periodicals
Which of the following combinations results in a decrease in sample size in a sample for attributes? Risk of Assessing Control Risk Too Low a. Increase b. Decrease c. Increase d. Increase Tolerable
Whatare the nine major steps utilized in a comprehensive approach to information system auditing? Explain why each step is important.
Why are data transmission controls so important? What are the key controls the auditor would expect to be present to ensure proper data transmission?
Identify four monitoring controls the auditor would expect to find in a welldesigned computer system. Explain the objective of each control identified.
Why will the audit profession move toward more testing of the systems processing as opposed to direct testing of account balances? Explain your rationale.
What is the difference between(a) independently testing the correctness of processing(b) independently testing the reliability of data?
What are the major objectives addressed by the test data method? When should test data be used; that is, when does test data have a competitive advantage over other audit approaches? What are the
What are the significant differences between the test data approach and the ITF approach? What deficiencies of the test data approach does the ITF overcome?
How does an auditor using an ITF keep from contaminating client files with data designed to test the client’s processing? Describe the two approaches most often used.
A staff auditor is discussing the use of concurrent audit techniques with a partner during the course of an audit engagement on a client with a relatively unsophisticated computer system. The partner
How do concurrent audit techniques differ from the more static audit techniques, such as test data or GAS? What audit objectives are accomplished by the concurrent audit techniques that might not be
Embedded audit modules were recommended as an approach that could work well in various environments. Briefly describe an embedded audit module, how it works, and the audit objectives that it could
Briefly explain how the SCARF audit approach works and the objectives that it addresses.
The tagging and tracing audit approach requires the auditor to develop modules that are incorporated into the application program. An embedded audit module also requires modules to be developed in
Does PC-based audit software, such as IDEA, have the ability to handle the records that would be associated with large clients like Ford Motor Company or Pillsbury?Explain.
An auditor decides to use IDEA to test the details of a material account balance. How can the auditor be sure that he or she has captured the detail file that supports the general ledger account
Identify one task, or one computer environment, in which the auditor would most likely prefer to use customized audit software as opposed to GAS.
Can auditors use one GAS, for example, IDEA, on different computerized files, such as accounts receivable and inventory files, that have different record formats? Explain.
What is a trading partner agreement? Why is it important that the auditor review all major trading partner agreements when auditing an e-business client?
How does e-business differ from e-commerce? What are the audit implications associated with these differences?
Will audit software continue to be used heavily in e-business and e-commerce clients? Explain.
Identify five ways in which an auditor might utilize spreadsheet software in conducting an audit.
What are the relative advantages of electronic audit documentation over paper-based documents? Do you see any practical disadvantages to electronic documents?
What is groupware? How can groupware be utilized to increase the efficiency of an audit? Explain and give an example.
What is an intelligent agent? Identify two major ways in which intelligent agents might be utilized to enhance the efficiency of an audit engagement.
What is an expert system? How might one be utilized in an audit engagement? What are the relative advantages and disadvantages of expert systems?
A significant advantage of the ITF over the test data approach is that the ITFa. Tests the operation of manual controls that are contained in an accounting application.b. Tests transactions
Which of the following would not be an appropriate use of IDEA software?a. Developing an aging report of accounts receivable.b. Reading a complete master file for an overall integrity review.c.
An auditor would most likely develop customized software rather than using GAS in which of the following situations?a. The client utilizes a database management system for inventory.b. The client’s
EDI refers toa. The electronic transfer of documents between organizations (e.g., sending invoices electronically between organizations).b. The transfer of files between a division of a company and
A concurrent audit technique such as tagging and tracing would be effective in addressing all of the following audit objectives except:a. Ensuring that submitted transactions have been fully
A company has a computer program that performs the processing for several different departments or divisions of the company, drawing on information stored in tables for specific rates, and so on. One
Which of the following statements regarding EDI and its audit implications are correct?I. EDI, when used effectively, will result in the elimination of most paper documents currently used for control
The tagging and tracing approach would most likely be considered for implementation when:a. The auditor wishes to select actual transactions to be printed out to an audit file for subsequent audit
Which of the following statements are correct regarding the potential audit use of embedded audit modules? Embedded audit techniques:I. Are designed by internal auditors, therefore they are of
Public accounting firms are likely to use expert systems toa. Supplement the auditor’s judgment in areas where defined answers are not clearcut.b. Ensure that all major aspects of a judgment are
Process tracing software can be used with test data to investigate an application for fraud because process tracing software cana. Be used to trace a transaction from its origination through to the
Which of the following procedures is least likely to be performed by an auditor using GAS? sa. Selection and printing of accounts receivable confirmations from a client’s master file.b. Evaluation
Detailed testing of controls in a computer system through the use of test data or an TFa. Can be performed using either real or simulated transactions.b. Is not convincing because many of the
Auditors have various EDP audit techniques available to aid in testing computer-based systems. Included in these audit techniques are (1) test data, (2) integrated test facility (ITF), (3) tagging
Levi-Strauss (Levi) is a large supplier of jeans to Wal-Mart and was one of the first to sign the vendor-managed inventory agreement. As part of the agreement, Wal-Mart agrees to provide important
It has been stated that internal auditors have developed computer audit approaches that should be considered by the external auditor in planning the conduct of an audit of a client who has a highly
An auditor is likely to encounter clients who have implemented all of their accounting on a personal computer system.Required:a. Write a brief internal control questionnaire to assist the auditor in
EDI has been described as a major change in the way organizations will process transactions in the future. Most paper will be eliminated, and the auditor will need to use new audit techniques to gain
Audit Techniques and Fraud Investigation) Computer-assisted audit techniques can be useful to the auditor in investigating alleged fraud.Required:Following is a list of scenarios in which fraud is
Recent advances in computing technology have allowed the auditors to gain efficiency by bringing the technology to the audit.Required:Briefly explain how each of the following technologies can assist
Firewalls are an integral part of every e-commerce company. The auditor decides to gain assurance on the functioning of a firewall that the client had implemented late in the last quarter of the
Review published research and write a report on the development of e-commerce. Interview at least one company in your area that has implemented e-commerce to determine the types of applications used,
Priceline.com is one of the e-tailers (e-commerce retailer) that have grown over the past few years. Priceline.com operates much like an online wholesale travel agent. It allows consumers to bid for
What are the major accounts in the revenue cycle? Briefly identify the relationships between them.
Automated cash registers can contribute effectively to the control structure of a retail organization. Briefly indicate the control procedures the auditor would expect to find in an automated cash
What are the key pieces of control information captured on a sales order? How would the gathering and use of such control information change when a sales order is captured immediately into a computer
We normally think about invoices being transmitted to customers through the mail.How else might invoices be transmitted to customers? What are the implications of these alternative means of
Briefly describe the difference between the roles played by the (1) credit card issuer and (2) the merchant bank in processing credit card transactions such as VISA or MasterCard. Address specific
What is a bill of lading? What audit evidence does it provide?
Explain the factors that would tend to cause some sales transactions to have higher risk than other transactions?
What factors are most likely to affect the inherent risk of a sales transaction? How would a high level of inherent risk affect the development of an audit of sales? Explain, using a specific example.
What important control functions are served by mailing monthly statements to customers? Why is it important that a separate section of the accounts receivable department be set up to handle customer
Whatare the major factors that most likely determine the auditor’s assessment of the control environment affecting the recording of sales? How does the auditor normally gather information on the
If sales orders are entered online to the computer system, prenumbered paperbased documents will not be prepared. What control procedures should be designed into the computer application to
What is a dual-purpose test?
Why is emphasis usually given to direct tests of the accounts receivable balance rather than the transactions that created that balance?
When should revenue normally be recognized fora. A construction contractor?b. An airline?c. A manufacturer?d. A mail-order retailer?
Identify and describe the three types of analytical procedures an auditor might use for the revenue cycle.
The auditor is concerned that fictitious sales have been recorded. The best audit procedure to identify the existence of the fictitious sales would be toa. Select a sample of recorded invoices and
Which of the following would not represent a factor the auditor would consider when assessing the inherent risk associated with a sales transaction?a. The existence of terms that specify the right of
The auditor generally makes a decision not to test the effectiveness of controls in operation whena. The preliminary assessment of control risk is at the maximum.b. It is more cost efficient to
A restaurant food chain has more than 680 restaurants. All food orders for each restaurant are required to be input into an electronic device, which records all food orders by food servers and
Which of the following controls would be least effective in ensuring that the correct product is shipped and billed at the approved price?a. Self-checking digits are used on all product numbers, and
The auditor wants to determine that only the marketing manager has approved changes to the product price file. Which of the following audit procedures would provide the most persuasive evidence that
To determine whether internal controls operated effectively to minimize errors of failure to invoice a shipment, the auditor would select a sample of transactions from the population represented by
A manufacturing client received a substantial amount of goods returned during the last month of the fiscal year and the first month after year-end. The client recorded the returns when credit memos
The confirmation of customers’ accounts receivable rarely provides reliable evidence about the completeness assertion becausea. Many customers merely sign and return the confirmation without
Field, CPA, is auditing the financial statements of Miller Mailorder, Inc. (MMI) for the year ended January 31, 2002. Field has compiled a list of possible errors and irregularities that may result
Bert Finney, CPA, was engaged to conduct an audit of the financial statements of Clayton Realty Corporation for the month ending January 31, 2004. The examination of monthly rent reconciliations is a
You are engaged in your first audit of the Licitra Pest Control Company for the year ended December 31, 2003. The company began doing business in January 2003 and provides pest control services for
Sean Edwards, CPA, is engaged to audit the financial statements of Matthews Wholesaling for the year ended December 31, 2001. Edwards obtained and documented an understanding of the internal controls
The following sales were selected for a cutoff test of Genius Monitors, Inc., for the 31 December 2003 financial statements. All sales are credit sales and are FOB shipping point. They are recorded
Confirmation of accounts receivable balances is a generally accepted auditing procedure when it is reasonable and practical.Required:a. Describe the conditions that should exist for confirmations of
You are auditing the estimated liability for warranty expense of an automobile manufacturer for the year ended December 31, 2003. The automobiles carry a five-year or 50,000 mile warranty (whichever
You are auditing Accounts Receivable of HUSKY Corp. as of December 31, 2002. The Accounts Receivable general ledger balance is $4,263,919.52. Download the data files from the IDEA Software CD. The
Many management frauds involve improper recording of revenue. Using The Wall Street Journal, Business Week, the SEC’s Audit and Accounting Enforcement Releases (website ), and similar sources, find
Why is it important that misstatements be carefully defined when planning a sample?
Why is it important to determine the completeness of the physical representation of the population (such as a trial balance of accounts receivable) from which a sample is to be selected?
Why is it so important to specify the audit objective before planning a sampling application?
What sampling methods are available for substantive testing, and under what conditions should each be used?

Showing 1400 - 1500 of 2659

First
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Last

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Campus Ambassador

Company Info

Security
Copyrights
Privacy Policy
Terms & Condition
SolutionInn Fee
Scholarship

Services

Sitemap
Fun
Definitions
Become Tutor
Study Help Categories
Recent Questions
Expert Questions

Copyright © 2024 SolutionInn All Rights Reserved.

Get the SolutionInn - Study Help App