When the auditor determines that controls are not operating effectively, the auditor needs to consider the kind of misstatements that could occur, how they might occur, and how the auditor would adjust substantive audit procedures Assume that the authorization process for ordering inventory was found to contain a material weakness. Identify the accounts that could contain misstatements, how the misstatements might occur, and how the auditor would adjust substantive audit procedures because of the material weakness.
Answer to relevant QuestionsIn analyzing the results of the tests of controls, there are two potential outcomes: (a) Deficiencies are identified (b) Deficiencies are not identified. What are alternative courses of action for the financial statement ...Refer to the Auditing in Practice feature, “Dual-Purpose Tests.” What is a dual-purpose test, and why might an auditor choose to perform dual purpose tests?The auditor is evaluating the internal control of a new client. Management has prepared its assessment of internal control and has concluded that it has some deficiencies, but no significant deficiencies and no material ...Identify typical accounting cycles not listed in the Exhibit and list their associated accounts.MULTIPLE-CHOICE QUESTIONS1. Which of the following statements best describes what is meant by the term appropriateness of audit evidence?a. Appropriateness is a measure of the quality of audit evidence.b. Appropriateness ...
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