Auditing A Practical Approach 1st Extended Canadian Edition Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren - Solutions

What is the common audit approach for auditing consolidated financial statements?
What things should the auditor consider when group entities are audited by other auditors?
Discuss the substantive procedures normally performed over intercompany balances.
In the planning of an audit, it was decided that cash would not be audited because it made up only 1 percent of total assets. You respond to this decision by saying:(a) Whether or not this was acceptable would depend on the company and the type of industry.(b) Cash is always going to be material,
The main evidence regarding year-end bank balances is documented in the:(a) bank deposit schedule.(b) interbank transfer schedule.(c) bank reconciliation.(d) standard bank confirmation.
In reviewing the bank reconciliation prepared by the client, the auditor finds a “miscellaneous reconciling item.” From discussion with the client, the auditor is told that this relates to foreign exchange fluctuations.The auditor should:(a) accept the client’s explanation.(b) accept the
The assertion that is the highest risk for an auditor in auditing investments is:(a) valuation.(b) existence.(c) completeness.(d) presentation and disclosure.
The control that would be the most effective in assuring that the proper custody of assets in the investing cycle is maintained is:(a) the purchase and sale of investments are executed on the specific authorization of the board of directors.(b) the recorded balances in the investment subsidiary
An auditor testing the reasonableness of long-term investments would ordinarily use analytical procedures to ascertain the reasonableness of the:(a) existence of unrealized gains or losses in the portfolio.(b) completeness of recorded investment income.(c) classification of current and non-current
If a client is not deemed to have “significant influence” in an investee company, to obtain audit evidence to verify the investment balance, the auditor should:(a) review the audited accounts of the investee company.(b) get an independent valuation of the assets and liabilities of the investee
When the client has control over an investee company, the most appropriate audit procedure to obtain evidence to verify the investee company’s accounts is to:(a) re-perform the audit of the investee company.(b) get an independent valuation of the assets and liabilities of the investee company.(c)
Explain why it is important to reassess materiality at the end of the audit.
What is the goal in evaluating audit evidence?
Provide three considerations when evaluating the sufficiency and appropriateness of audit evidence.
Provide one consideration management should take into account when assessing the going concern assumption.
Provide one consideration the auditor should take into account when assessing the going concern assumption.
Does the going concern assumption always apply to all audits?
What are management's responsibilities with respect to contingent liabilities?What are the auditor’s responsibilities?
List three procedures the auditor is required to perform with respect to contingent liabilities.
Describe the two types of subsequent events that are required to be considered as part of the audit of the financial statements.
Provide two types of procedures an auditor may perform to identify a subsequent event.
What should an auditor do when, after the discovery of a subsequent event, the client does not take appropriate action?
What does an auditor do when misstatements identified during the audit are not corrected by the client?
Why is it important to consider the prior-year unadjusted misstatements?
Name two qualitative considerations that may be taken into account when assessing misstatements.
Name two factors included in the description of management's responsibility for the financial statements, as included in the audit report.
Name five components of the audit report.
What is the auditor’s responsibility for the financial statements, as included in the audit report?
Provide an example of a common emphasis of matter included in audit reports.
Does the inclusion of an emphasis of matter in the audit report result in the report being qualified?
Describe one situation in which scope limitation may be appropriate in the audit report.
Name five items of governance interest that would be communicated to those charged with governance.
Is communication with those charged with governance always in the form of a letter?
If communication is not always in the form of a letter, what other forms of communication could the auditor use?
Provide three examples of when an auditor may issue an audit report on a special purpose framework.
What is a report on a component of the financial statements?
Does the auditor provide any assurance when he or she performs agreed-upon procedures relating to the entity’s financial information other than the financial statements?
List the assertions for classes of transactions and account balances.
What does the accuracy assertion mean?
What is the auditor trying to ensure when conducting cut-off tests?
What is a bank confirmation?
List three things that may be included in a management representation letter.
Which assertion is tested when an auditor traces details of tangible assets on hand back to the recorded amount?
What are the three board categories of corroborating evidence?
What is the risk when using evidence that is held by the client?
Which is the least persuasive evidence?
What factors may influence an auditor's decision on the need to use an expert?
How might an auditor assess the capacity of an expert?
Why is it important that an expert’s report include details of data sources used?
Who is the group engagement partner?
What are some of the factors that a group engagement partner will consider when assigning work to a component auditor?
If the group engagement partner believes that the component auditor has not gathered sufficient appropriate audit evidence, what kind of audit report may be issued?
Why might an auditor inspect documents when testing controls?
Provide some examples of how an auditor might use observation as part of their-evidence-gathering procedures.
At which stage(s) of an audit will an auditor utilize a re-performance procedure?Explain.
How does an auditor decide how much evidence is sufficient?
What will an auditor do if they believe that a client has internal controls that can reduce the likelihood of a material misstatement?
What will an auditor do if they decide that a client does not have in place appropriate controls for the identified risk?
What is a current file?
What is a permanent file?
What will an auditor document during the planning stage of the audit?
What is audit sampling?
When is it appropriate to use audit sampling?
How does audit sampling relate to audit risk?
How does sampling risk relate to tests of controls and substantive testing?
What is non-sampling risk?
What is statistical sampling?
What is non-statistical sampling?
What are the-advantages and disadvantages of statistical and non-statistical sampling?
What is the difference between random and haphazard sample selection?
What is the risk in using systematic sample selection?
What factors should be considered when selecting a sample?
What are the factors that influence sample size when testing controls?
What is the relationship between the tolerable rate of deviation and sample size?
How is the auditor's required confidence level influenced by control risk?
What are the factors that influence sample size when conducting substantive procedures?
What influences an increase in the auditor’s assessment of the risk of material misstatement?
Describe variables estimation sampling.
What will an auditor consider when evaluating test results?
What is the rate of deviation and when will an auditor calculate this?
What will an auditor do if the rate of deviation exceeds the tolerable rate?
What will be an auditor’s strategy when control risk is assessed as high?
What are the two broad purposes of tests of controls?
What are the main objectives when conducting substantive tests of account balances?
What are the three main categories of substantive procedures?
What are the two most common types of testing that can be started during the interim audit?
What does the extent of audit testing refer to?
What is an internal control?
Why is it important to understand (and assess) internal controls?
Name a generally accepted framework used to describe internal controls.
What are the seven generally accepted objectives of internal controls as related to the recording of transactions?
Why are internal controls important to an organization?
Why are internal controls important to an auditor?
Why is segregation of duties important when understanding internal control?
How does management's attitude and control consciousness affect the internal control environment of an organization?
What are the different types of controls?
What is the difference between an application control and an IT general control?
Which type of control, preventive or detective, is usually a more efficient control type to test?
Name three factors to consider when deciding the extent of testing to be performed.
When would testing application controls warrant performing a test of more than one?

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Auditing A Practical Approach 1st Extended Canadian Edition Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren - Solutions

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