Question 3 (20 marks) A friend of yours is presently undertaking a vacation job at your...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 3 (20 marks) A friend of yours is presently undertaking a vacation job at your audit firm. This is his first exposure to auditing as he has neither studied auditing at university nor worked in an audit firm previously. On glancing through an audit file, he came across the following note, and has asked you what it means, "Having completed our risk assessment procedures we are confident that the risk of material misstatement for the assertions relating to trade accounts payable is similar to that of last year. Therefore, our audit plan will be to carry out a mix of tests of controls and substantive testing." YOU ARE REQUIRED TO explain to your friend the meaning of the following terms in the context of an audit. You must link all the terms together in your explanation. 1. Risk assessment procedures 2. Material misstatement 3. Assertions 4. Audit plan 5. Substantive testing 6. Tests of controls. (4) (4) (3) (3) (3) (3) Question 3 (20 marks) A friend of yours is presently undertaking a vacation job at your audit firm. This is his first exposure to auditing as he has neither studied auditing at university nor worked in an audit firm previously. On glancing through an audit file, he came across the following note, and has asked you what it means, "Having completed our risk assessment procedures we are confident that the risk of material misstatement for the assertions relating to trade accounts payable is similar to that of last year. Therefore, our audit plan will be to carry out a mix of tests of controls and substantive testing." YOU ARE REQUIRED TO explain to your friend the meaning of the following terms in the context of an audit. You must link all the terms together in your explanation. 1. Risk assessment procedures 2. Material misstatement 3. Assertions 4. Audit plan 5. Substantive testing 6. Tests of controls. (4) (4) (3) (3) (3) (3)
Expert Answer:
Answer rating: 100% (QA)
Risk assessment procedures These are the methods used by auditors to identify and assess the risks o... View the full answer
Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
Posted Date:
Students also viewed these accounting questions
-
Tessa's Techs is a small, competitive firm that provides online and telephone support for people with computer problems. The marginal product of labor (measured in numbers of support requests...
-
A trader was asked to show a bid to buy $110.00 calls from a customer. The stock price was $105.00, the interest rate was 5%, and the implied volatility was 35%, and there were 60 days until expiry...
-
"I'm not sure we should lay out $300,000 for that automated welding machine," said Jim Alder, president of the Superior Equipment Company. "That's a lot of money, and it would cost us $84,000 for...
-
IfAUB=AUC and An B=An C, then B = C. Statement-2 AU (BOC) = (AUB) n (AUC)
-
Currently, a monopolist's profit-maximizing output is 200 units per week. It sells its output at a price of $60 per unit and collects $30 per unit in revenues from the sale of the last unit produced...
-
Let X have probability density f X . Find the probability density function of the random variable defined by Y = aX + b.
-
Record the following transactions in the journal of Birds Eye Music. Explanations are not required. 2009 Dec 19 Received a $6,000, 60-day, 12% note on account from AVC Company. Made an adjusting...
-
A machine shop has two machines, A and B. Four jobs need to be processed through machine A first and B second. Job 1 will take one hour on machine A and three hours on machine B. Job 2 will take...
-
What is the operations performance at operational level and any two trade-offs in operations performance objectives of Domino's Pizza?
-
When buying or leasing a new car, one of the factors that customers consider is the type of fuel it uses. Some people prefer vehicles that use diesel fuel, while others favor vehicles that use...
-
Write a C program that uses the random number generator rand( ) to create an array with 20 numbers in the range from 1 to 50 and disply them in a row. The program sorts the array elements and...
-
Overview For this activity, you'll be evaluating marketing tools that support marketing strategies. You'll present that assessment as an infographic. Sharing information graphically and succinctly is...
-
Discuss why NoSQL databases have gained huge popularity in recent years.
-
Riverside Incorporated makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold Total costs Variable costs Fixed costs Total costs Cost per unit...
-
Avery Company's budgeted prices for direct materials, direct manufacturing labour, and direct marketing (distribution) labour per attach case are $37, $7, and $12, respectively. The president is...
-
All of these are organizations designed to develop the profession of supply chain management, except: The Council of Supply Chain Management Professionals ( CSCMP ) . The Institute for Supply...
-
Write a report on IFRS 8 Operating Segments. the report should contain: a. Definition and explanation. b. Scope c. Recognition and measurement. d. Disclosure requirements.
-
Multiple Choice Questions: 1. The largest component of aggregate demand is? a. Government purchases. b. Net exports. c. Consumption. d. Investment. 2. A reduction in personal income taxes, other...
-
Banco Santiago wants to make a bid-ask spread of 0.65 percent on its foreign exchange transactions. If the ask rate on the Mexican peso (MP) is MP10.3092/$, what does the bid rate have to be?
-
Hogvertz Elvin Catering (HEC) is considering switching from its old food maker to a new Wonder Food Maker. Both food makers will remain useful for the next 10 years, but the new food maker will...
-
Wolfgangs Masonry management estimates that it takes the company 27 days on average to pay off its suppliers. It also knows that the company has days sales in inventory of 64 days and days sales...
-
Describe the financial accounting journal entry to record the sale/disposal of a fixed asset.
-
Ski resorts are interested in the mean age that children take their first ski and snowboard lessons. They need this information to plan their ski classes optimally. identify: a. the population, b....
-
Insurance companies are interested in the mean health costs each year of their clients, so that they can determine the costs of health insurance. identify: a. the population, b. the sample, c. the...
Study smarter with the SolutionInn App