Two Auditing in Practice features in the chapter highlight audit deficiencies related to tests of controls and substantive procedures that were noted in PCAOB inspection reports. See “The Need for Performing and Considering the Results of Tests of Controls” and “Not Performing Sufficient Appropriate Substantive Audit Procedures Leads to Low Audit Quality.” Obtain a recent PCAOB inspection report of one of the Big 4 firms. Select several audit deficiencies identified in the report and determine which phase of the audit opinion formulation process the deficiency relates to. Discuss how the fundamental principle of professional skepticism might have been helpful in avoiding such deficiencies.
Answer to relevant QuestionsTRUE-FALSE QUESTIONS1. The appropriateness of audit evidence refers to its relevance and reliability.2. The sufficiency of evidence is a measure of evidence quality.3. When testing for existence, the auditor will vouch ...Refer to Exhibit. Describe how the appropriateness and sufficiency of evidence for a specific account is influenced by the risk of material misstatement associated with that account. Contrast how appropriateness and ...An auditor has to determine both the reliability and the relevance of potential audit evidence in order to determine that appropriate audit evidence is gathered.a. Explain the difference between relevance and reliability.b. ...An auditor typically selects samples when testing controls. What are some factors that that affect the sample sizes used when testing controls?The Professional Judgment in Context feature "Evidence-Related Findings in PCAOB Inspection Reports" presented at the beginning of the chapter provides excerpts of various PCAOB inspection reports issued in 2012 and ...
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