New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
auditing international approach
Auditing And Assurance Services A Systematic Approach 5th Edition William Messier, Steven Glover, Douglas Prawitt - Solutions
What are management's incentives for establishing and maintaining strong internal control? What are the auditor's main concerns with inter- nal control? P-985
Understand how to flowchart an accounting cycle. P-985
Identify and understand general and application controls. P-985
Understand the auditor's communication of internal control-related matters. P-985
Understand how to assess control risk when an entity's accounting transactions are processed by a service organization. P-985
Understand the considerations for the timing of audit procedures. P-985
Understand audit strategies for the nature, timing, and extent of substantive procedures based on different levels of detection risk. P-985
Know the types of tests of controls. P-985
Know how to assess the level of control risk. P-985
Identify the tools available for documenting the understanding of internal control. P-985
Know how to develop an understanding of an entity's internal control. P-985
Understand how to plan an audit strategy. P-985
Understand the effect of information technology on internal control. P-985
Be able to identify the components of internal control. P-985
Know what controls are relevant to the audit. P-985
Know the definition of internal control. P-985
Understand the importance of internal control to management and auditors. P-985
Post, CPA, accepted an engagement to audit the financial statements of General Company, a new client. General is a publicly held retailing entity that recently replaced its operating management. In the course of applying auditing procedures, Post discovered that General's financial statements may
For many years the financial and accounting community has recognized the importance of the use of audit committees and has endorsed their for- mation. By now the use of audit committees has become widespread. Independent auditors have become increasingly involved with audit com- mittees and
A CPA has been asked to audit the financial statements of a publicly held company for the first time. All preliminary verbal discussions and inquiries the CPA, the company, the predecessor auditor, and all other neces- sary parties have been completed. The CPA is now preparing an engage- ment
The audit committee of the board of directors of Unicorn Corporation asked Tish & Field, CPAs, to audit Unicorn's financial statements for the year ended December 31, 2006. Tish & Field explained the need to make an inquiry of the predecessor auditor and requested permission to do so. Unicorn's
Dodd, CPA, audited Adams Company's financial statements for the year ended December 31, 2005. On November 1, 2006, Adams notified Dodd that it was changing auditors and that Dodd's services were being termi- nated. On November 5, 2006, Adams invited Hall, CPA, to make a proposal for an engagement
The assurance bucket is filled with all of the following types of evidence excepta. Test of controls.b. Business risks.c. Substantive analytical procedures.d. Tests of details. p-968
Trend analysis is best described bya. The comparison, across time or to a benchmark, of relationships be- tween financial statement accounts or between an account and nonfi- nancial data. Development of a model to form an expectation using financial data, nonfinancial data, or both to test account
For all audits of financial statements made in accordance with generally accepted auditing standards, the use of analytical procedures is required to some extent era In the Planning Stage? As a Substantive Test? In the Review Stage? p-968
The primary objective of final analytical procedures is toa. Obtain evidence from details tested to corroborate particular assertions.b. Identify areas that represent specific risks relevant to the audit. p-968
To help plan the nature, timing, and extent of substantive procedures, pre- liminary analytical procedures should focus ona. Enhancing the auditor's understanding of the client's business and of events that have occurred since the last audit date.b. Developing plausible relationships that
Which of these statements concerning illegal acts by clients is correct?a. An auditor's responsibility to detect illegal acts that have a direct and material effect on the financial statements is the same as that for errors and fraud.b. An audit in accordance with generally accepted auditing
An auditor who discovers that a client's employees paid small bribes to municipal officials most likely would withdraw from the engagement ifa. The payments violated the client's policies regarding the prevention of illegal acts.b. The client receives financial assistance from a federal government
As generally conceived, the audit committee of a publicly held company should be made up ofa. Representatives of the major equity interests (preferred stock, common stock).b. The audit partner, the chief financial officer, the legal counsel, and at least one outsider.c. Representatives from the
When planning an audit, an auditor shoulda. Consider whether the extent of substantive procedures may be reduced based on the results of the internal control questionnaire. Lb. Determine planning materiality for audit purposes.c. Conclude whether changes in compliance with prescribed internal
During the initial planning phase of an audit, a CPA most likely would Identify specific internal control activities that are likely to prevent fraud, Evaluate the reasonableness of the client's accounting estimates. Discuss the timing of the audit procedures with the client's management.d. Inquire
Miller Retailing, Inc., maintains a staff of three full-time internal auditors who report directly to the ontroller In planning to use the internal auditors help in performing the audit, the independent auditor most likely will a Place limited reliance on the work performed by the internal
Which of the following matters generally is included in an auditor's en- gagement letter? Fa Management's responsibility for the entity's compliance with laws and regulations.b. The factors to be considered in setting preliminary judgments about materiality.c. Management's liability for illegal
Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor'sa. Awareness of the consistency in the application of generally accepted accounting principles between periods.b. Evaluation.of all matters of continuing
List and discuss the four categories of financial ratios that are presented in the chapter. p-968
Consider the "assurance bucket" analogy. Why are some of the buckets larger than others for particular assertions or accounts? p-968
Why does the "audit testing hierarchy" begin with tests of controls and substantive analytical procedures? p-968
Significant differences between the auditor's expectation and the client's book value require explanation through quantification, corroboration, and evaluation. Explain each of these terms. p-968
When discussing the use of analytical procedures, what is meant by the "precision of the expectation"? In applying this notion to an analytical procedure, how might an auditor calculate a tolerable difference? p-968
What are the purposes for using preliminary analytical procedures? p-968
What are the three general types of audit tests? Define each type of audit test and give two examples. p-968
List three audit procedures that may be used to identify transactions with related parties. p-968
Distinguish between illegal acts that are "direct and material" and those that are "material but indirect." List five circumstances that may indicate that an illegal act may have occurred. p-968
List the matters an auditor should consider when developing an overall audit plan. p-968
What is an audit committee, and what are its responsibilities? p-968
What factors should an external auditor use to assess the competence and objectivity of internal auditors? p-968
What is the purpose of an engagement letter? List the important informa- tion that the engagement letter should contain. p-968
Who is responsible for initiating the communication between the predeces- sor and successor auditors? What type of information should be requested from the predecessor auditor? p-968
What types of inquiries about a prospective client should an auditor make to third parties? p-968
Identify financial ratios that are useful as analytical procedures. p-968
Understand the audit testing hierarchy. p-968
Learn the purposes and types of analytical procedures. p-968
Know the types of audit tests. p-968
Identify the steps that are performed in planning an audit engagement. p-968
Understand the steps that are involved in the preliminary engagement activities. p-968
Know the responsibilities of the audit committee and how it relates to the external auditors. p-968
Understand how the work of the internal auditors can assist in the performance of the audit. p-968
Know the types of information that are included in an engagement letter. p-968
Know what is required to establish an understanding with the client. p-968
Understand the auditor's requirements for client acceptance and continuance. p-968
Part I: Merry-Go-Round (MGR), a clothing retailer located primarily in shopping malls, was founded in 1968. By the early 1990s, the company had gone public and had expanded to approximately 1,500 stores, 15,000 employees, and $1 billion in annual sales. The company's locations in malls targeted the
Audits can be categorized into five types: (1) financial statement audits, (2) audits of internal control, (3) compliance audits, (4) operational audits, and (5) forensic audits. Required: For each of the following descriptions, indicate which type of audit (finan- cial statement audit, audit of
Dale Boucher, the owner of a small electronics firm, asked Sally Jones, CPA, to conduct an audit of the company’s records. Boucher told Jones that the audit was to be completed in time to submit audited financial statements to a bank as part of a loan application. Jones immediately accepted the
Which of the following would be considered part of a consulting services engagement? I. Expressing an opinion about the reliability of a client's financial state- ments. II. Reviewing and commenting on a client-prepared business plan.a. I only.b. If only.c. Both I and II.d. Neither I nor II. LO587
Operational auditing is oriented primarily towarda. Future improvements to accomplish the goals of management.b. The accuracy of data reflected in management's financial records.c. Verification that an entity's financial statements are fairly presented.d. Past protection provided by existing
Which of the following is not a part of the role of internal auditors?a. Assisting the external auditors.b. Providing reports on the reliability of financial statements to investors and creditors.c. Consulting activities.d. Operational audits. LO587
The Public Company Accounting Oversight Board a/Is a quasi-governmental organization that has legal authority to set au- diting standards for audits of public companies.b. c.d. Is a quasi-governmental organization that has legal authority to set ac- counting standards for public companies. Is a
Which of the following statements best describes management's and the external auditor's respective levels of responsibility for a public company’s financial statements?a. Management and the external auditor share equal responsibility for the fairness of the entity’s financial statements in
Which of the following best describes the general character of the three generally accepted auditing standards classified as standards of fieldwork?a. The competence, independence, and professional care of persons performing the audit.b. Criteria-for the content of the auditor's report on financial
Which of the following is correct regarding the types of audits over which the AICPAs Auditing Standards Board and the PCAOB, respectively, have standard-setting authority?ASB PCAOBa. Nonpublic company audits Nonpublic company audits ae company audits Public company audits Nonpublic company audits
Which of the following best describes the relationship between business objectives, strategies, processes, controls, and transactions?achieve its objectives, a business formulates strategies and imple- ments processes, which are carried out through business transactions. The entity's information
Which of the following best places the events of the last several years in proper sequence?a. Increased consulting services to audit clients, Enron and other scandals, A Sarbanes- Oxley Act, prohibition of most consulting work for audit clients, establishment of PCAOB._b. Increased consulting
What are some of the common documents encountered by auditors that are required by the Securities Exchange Act of 1934? What is the purpose of each of these documents? LO587
What role does the SEC play in the establishment of accounting and au- diting standards for public companies? LO587
What kind of organization is the PCAOB, why was it formed, and what does it do? LO587
The AICPA performs a number of functions that directly bear on indepen- dent auditors of nonpublic entities, including promulgation of rules and standards. List five types of standards issued by the AICPA. LO587
List the various types of auditors. LO587
Give one example each of compliance, operational, and forensic audits. LO587
Compare and contrast management's responsibility for the entity's finan- cial statements with the auditor's responsibilities for detecting errors and fraud in the financial statements. LO587
Why is independence such an important standard for auditors? How does auditor independence relate to the agency relationship between owners and managers discussed in Chapter 1? LO587
List the three categories of GAAS. Discuss why the GAAS and the SAS are considered minimum standards of performance for auditors. LO587
How might the three categories of management assertions provide a pow- erful tool for the financial statement auditor? LO587
What roles do information systems and systems of internal control play in the high-level model of business discussed in the chapter, and why might it be important for an auditor to understand these roles? LO587
Briefly discuss the essential components of the high-level model of busi- ness offered in the chapter. Why might understanding the characteristics of a client's business in each of these areas be important for a financial statement auditor? LO587
Discuss how the events that have so dramatically affected auditors and the public accounting profession since the Enron scandal may in some senses be "healthy" for the profession. LO587
Briefly discuss the key events that led up to the Sarbanes-Oxley Act of 2002 and the creation of the PCAOB. LO587
Identify and be familiar with the major orga- nizations that affect the public accounting profession's environment. LO587
Be familiar with the different types of auditors. LO587
Be familiar with the various services offered by assurance providers. LO587
Understand the organization and composition of public accounting firms. LO587
Know that management is primarily responsible for the entity's financial statements and understand the auditor's responsibility for detecting errors, material fraud, and illegal acts. LO587
Understand that auditing is a profession that places a premium on ethical behavior and that is governed by a Code of Professional Conduct. LO587
Be aware that the PCAOB adopted the ASB's SAS on an interim basis and is now issuing its own Auditing Standards (AS) that apply to the audits of public companies. LO587
Understand the nature of the Statements on Auditing Standards (SAS) as interpretations of the 10 GAAS.
Be familiar with the 10 "generally accepted auditing standards" (GAAS). LO587
Understand that auditing standards are established by the AICPA's Auditing Standards Board (ASB) for private entities, and by the Public Company Accounting Oversight Board (PCAOB) for public companies. L0256
Recognize the sets of management assertions that are implicit in a business entity's financial statements. L0256
Be familiar with a five-component model of business processes (or cycles) that auditors often use in organizing the audit into manageable components. L0256
Understand a high-level model of a business entity, including the elements of corporate governance, objectives, strategies, processes, controls, transactions, and financial statements. L0256
Showing 400 - 500
of 2824
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last
Step by Step Answers
Get 50% OFF
Claim Now
