w1 Auditing assgn
Auditing and Assurance:
Week 1:
Chapter 1: Question 1-44:
In examining the audit opinion formulation process, identify the areas in which auditor judgment must be made. To what extent does that judgment extend beyond accounting issues? Answer: Well in this process there are four different phases the auditors must follow in order to reach phase 5. Whereas, this determines whether or not there is any fairness of an organization’s financial statements and, for integrated audits, the effectiveness of their internal control. Phase (1) to minimize risk, the auditor pays a great deal of attention to client selection and retention. Phase (2) is to obtain an understanding of the client’s business, industry within it operates, and so forth. Phase (3) involves obtaining evidence about control over financial reporting and Phase (4) deals with testing account balances. And finally, phase (5) the auditor will make a decision whether enough evidence was given to support the audit and what type of opinion should be issued
It is claimed by some (although not always correctly) that they favor international accounting standards because they are more principles-based. Should principles-based accounting lead to more or less consistent audit judgments? Explain. Answer: Principle-based accounting allows auditors to follow few rules and put in little implementation guidance. I believe this should lead to less consistent audit judgment because it does not ensure that an organization’s financial statements are fairly reported.
Should a public accounting firm expect that “professional judgments” made by its staff be, for the most part, consistent with each other? If not, why not? If yes, how are public accounting firms structured to help ensure consistent audit judgments? Answer: Yes, I believe that professional judgment should be a part of an accounting firm business structure always. It is like ethics, business must conduct themselves in a matter that shows business etiquettes.
Week 1:
Chapter 1: Question 1-44:
In examining the audit opinion formulation process, identify the areas in which auditor judgment must be made. To what extent does that judgment extend beyond accounting issues? Answer: Well in this process there are four different phases the auditors must follow in order to reach phase 5. Whereas, this determines whether or not there is any fairness of an organization’s financial statements and, for integrated audits, the effectiveness of their internal control. Phase (1) to minimize risk, the auditor pays a great deal of attention to client selection and retention. Phase (2) is to obtain an understanding of the client’s business, industry within it operates, and so forth. Phase (3) involves obtaining evidence about control over financial reporting and Phase (4) deals with testing account balances. And finally, phase (5) the auditor will make a decision whether enough evidence was given to support the audit and what type of opinion should be issued
It is claimed by some (although not always correctly) that they favor international accounting standards because they are more principles-based. Should principles-based accounting lead to more or less consistent audit judgments? Explain. Answer: Principle-based accounting allows auditors to follow few rules and put in little implementation guidance. I believe this should lead to less consistent audit judgment because it does not ensure that an organization’s financial statements are fairly reported.
Should a public accounting firm expect that “professional judgments” made by its staff be, for the most part, consistent with each other? If not, why not? If yes, how are public accounting firms structured to help ensure consistent audit judgments? Answer: Yes, I believe that professional judgment should be a part of an accounting firm business structure always. It is like ethics, business must conduct themselves in a matter that shows business etiquettes.