A Public Accountant (PA) was recently promoted to senior accountant. He was put in charge of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A Public Accountant (PA) was recently promoted to senior accountant. He was put in charge of the audit on a grocery store, Mellow Markets, because of his experience with other grocery clients. This is the first year Mellow Markets was audited. Mellow Markets intends to take its audited financial statements to a bank to secure a loan. Because this was the PA's first audit as a senior, bringing the job in on budget was an important objective for him. Since this was the first time Mellow Markets is to be audited, there was no prior year audit program for reference. The PA's experience with other grocery clients tells him that all grocery clients have the same operational and accounting practices. To save time, the PA used the audit program from one of his other grocery clients. There were two inexperienced staff assistants for the audit. The PA gave the assistants the audit program and told them to carry out the procedures in the program. As a senior, the PA's time is billed out at a much higher rate than that of the staff accountants. Therefore, it would be easier to meet the budget if the PA does not spend too much time on the audit. As a result, the PA supervised the assistants by calling them once a day from another audit on which he was working. When the staff accountants had difficulties understanding the program, such as the purpose of a procedure, how to carry out a procedure, appropriateness of a procedure, and possible missing procedures, he always gave clear instructions about how to carry out procedures in the program. He told the staff accountants not to worry about the program because a similar program is used for several other grocery client audits. After the staff accountants had completed all procedures in the program, the PA reviewed the work and was satisfied that all procedures in the audit program were properly carried out. He then submitted the job for review by the manager. Required: Is the audit properly done in according to both the general standards and the examination standards in the generally accepted audit standards? Why, why not? A Public Accountant (PA) was recently promoted to senior accountant. He was put in charge of the audit on a grocery store, Mellow Markets, because of his experience with other grocery clients. This is the first year Mellow Markets was audited. Mellow Markets intends to take its audited financial statements to a bank to secure a loan. Because this was the PA's first audit as a senior, bringing the job in on budget was an important objective for him. Since this was the first time Mellow Markets is to be audited, there was no prior year audit program for reference. The PA's experience with other grocery clients tells him that all grocery clients have the same operational and accounting practices. To save time, the PA used the audit program from one of his other grocery clients. There were two inexperienced staff assistants for the audit. The PA gave the assistants the audit program and told them to carry out the procedures in the program. As a senior, the PA's time is billed out at a much higher rate than that of the staff accountants. Therefore, it would be easier to meet the budget if the PA does not spend too much time on the audit. As a result, the PA supervised the assistants by calling them once a day from another audit on which he was working. When the staff accountants had difficulties understanding the program, such as the purpose of a procedure, how to carry out a procedure, appropriateness of a procedure, and possible missing procedures, he always gave clear instructions about how to carry out procedures in the program. He told the staff accountants not to worry about the program because a similar program is used for several other grocery client audits. After the staff accountants had completed all procedures in the program, the PA reviewed the work and was satisfied that all procedures in the audit program were properly carried out. He then submitted the job for review by the manager. Required: Is the audit properly done in according to both the general standards and the examination standards in the generally accepted audit standards? Why, why not?
Expert Answer:
Answer rating: 100% (QA)
ANSWER No the audit conducted by the Public Accountant PA on Mellow Markets does not adhere to both the general standards and the examination standard... View the full answer
Related Book For
Auditing Cases An Interactive Learning Approach
ISBN: 978-0132423502
4th Edition
Authors: Steven M Glover, Douglas F Prawitt
Posted Date:
Students also viewed these accounting questions
-
A. Based on the information below, under what conditions, if any, G. Wee would be allowed to prepare compilation of the financial statements of South Plastics Inc.? G. Wee is on the board of...
-
Introduction In 2010, New United Motor Manufacturing, Inc., a unique and highly successful joint venture between Americas General Motors and Japans Toyota, went out of business. NUMMI, as the...
-
Express the traction boundary condition (12.3.8) in terms of displacement and temperature for the plane stress problem. Equation 12.3.8 T = Oxnx + xyny = (Tr), T" = Txynx + ayny
-
What is the significance of lipid A?
-
Calculate (-3)2 + 3.2
-
If gas is put in a closed container, it will expand and fill the container entirely and total pressure will drop. (True/False)
-
Kristine bought a Rocky Mountain Chocolate Factory franchise. Her franchise agreement required her to purchase a cash register that cost $3,000, with an annual maintenance fee of $773. The agreement...
-
In November, Trinity Donuts incurred $8850 in total costs related to the production of 3500 donuts. In December, Trinity incurred $8600 in total costs. Total fixed costs are $1850 per month. By how...
-
Figure 2 shows a CMOS inverter along with its Voltage Transfer Characteristics (VTC). 1. Assuming that VDD = 5V, Vn = [Vp| = 1V, l =Ap = 0V-1, provide the values of the voltages marked on the VTC in...
-
With reference to the Example 8, Chapter 8, test the equality of the variances for the two aluminum alloys. Use the 0.02 level of significance. Data From Example 8 EXAMPLE 8 Graphics to accompany a...
-
What is the difference between traditional Keynesian and new Keynesian economics?
-
Explain why a 40 percent across-the-board tax increase on businesses might harm consumers.
-
Who would pay a tax imposed on the supplier when the price elasticity of supply is inelastic and the price elasticity of demand is elastic?
-
What, if any, similarities are there among the theories of economics discussed in this chapter regarding the use of fiscal and monetary policies to stimulate real GDP?
-
A company is developing its weekly production plan. The company produces two products, A and B, which are processed in two departments. Setting up each batch of A requires $60 of labor while setting...
-
What is the difference between direct materials and indirect materials?
-
With reference to Exercise 11.65, test the null hypothesis \(\beta=1.5\) against the alternative hypothesis \(\beta>1.5\) at the 0.01 level of significance. Data From Exercise 11.65 11.65 The data...
-
With reference to Exercise 11.65, construct a \(99 \%\) confidence interval for \(\alpha\).
-
The data below pertains to the number of hours a laptop has been charged for and the number of hours of backup provided by the battery. (a) Use the first set of expressions on page 330, involving...
Study smarter with the SolutionInn App