accounting department lacking in enough adequately trained personnel. When Susan‚ NYH’s Accounting Manager asks the auditor for help in closing the books for the second-quarter‚ the auditor must decide how to proceed. The auditor has two main options: help Susan close the books or decline Susan’s request for help. Both of these options have their advantages and disadvantages. The auditor must weight the costs and benefits of both providing assistance in NYH’s bookkeeping. One benefit of providing assistance
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This paper focuses on the significance of audit planning to an auditor who is willing to engage with a multinational company. In this case‚ the paper focuses on the value of having an audit plan for Golden Ale‚ a multinational company dealing in the manufacture and bottling of brews. Audit Planning Audit planning is vital for every business that seeks to have a competitive edge over its neighbors. The purpose of a plan to the auditor is to ensure that there is consistency in the work he/she carries
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[3] Understand intuitively the demand for auditing and the desired characteristics of auditors and audit services through an analogy to a house inspector and a house inspection service. [4] Understand the relationships among auditing‚ attestation‚ and assurance services. [5] Know the basic definition and three fundamental concepts of a financial statement audit. Understand why on most audit engagements an auditor tests only a sample of transactions that occurred. Be able to describe the basic financial
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Students can refer to the AAA and AICPA definitions in Chapter 1. Some instructors may want to extend the consideration of definitions to include the internal and governmental definitions (located in Module D). In response to “What do auditors do?‚” students can refer to Exhibit 1.2 and respond in terms of: (1) obtaining and evaluating evidence about assertions management makes about economic actions and events‚ (2) ascertaining the degree of correspondence between the assertions and
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Inc 1 Auditors should not insist that their clients accept all proposed audit adjustments even those that have an “immaterial” effect on the given set of financial statements. Because “immaterial” effect on the financial statements will not affect the users’ decisions. Therefore‚ auditors have to confirm if the effects on the financial statements are really “immaterial”. If there are really “immaterial”‚ sometimes the auditor would be forced by the clients to ignore it. So the auditor should give
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Accounting Horizons Vol. 21‚ No. 2 June 2007 pp. 165–187 Auditor Communications with the Audit Committee and the Board of Directors: Policy Recommendations and Opportunities for Future Research Jeffrey Cohen‚ Lisa Milici Gaynor‚ Ganesh Krishnamoorthy‚ and Arnold M. Wright SYNOPSIS: To contribute to the Public Company Accounting Oversight Board (PCAOB) project on auditor communications with audit committees and boards of directors‚ we present in this paper a review of relevant academic literature
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Enron Corporation and Andersen‚ LLP Accounting Fraud and Auditor Legal Liability 1 - What were the business risks Enron faced‚ and how did those risks increase the likelihood of material misstatements in Enron’s financial statements? The business risks that Enron faced included foreign currency risks and price instability‚ which is common for the energy industry. In addition‚ Enron faced pressure to perform well so that the stock price would rise. These risks increased
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control that should be performed by an auditor in each of the following areas: i. Cash receipts ii. Cash payments iii. Bank reconciliations (c) Summarize seven sources of internal control risks that have an impact on the financial reporting framework in an organization. Q2 (a) Outline four audit procedures you would carry out to verify the following items: i. Leased property ii. Goodwill (b) Makau and Associates‚ an accounting firm‚ are the auditors of Eastview Petroleum Ltd. For the
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constructive nowadays. Auditors of Equity Funding failed to collect sufficient evidence‚ check internal control and substantiate computer system. The audit premise----- understanding internal control system AUS 402.41 requires the auditor to obtain an understanding of internal control relevant to the audit. The effective internal control can provide “protection against human errors and reduce errors or irregularities’ (Leung et al‚ 2007)‚ as well as provide reasonable assurance to auditors for relying on
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com/324/audit.html#ixzz2YHSqnwZ5 What does a bank auditor do? A bank auditor monitors the operations of her bank to ensure its compliance with industry guidelines and adherence to measures that deter fraud. Her job generally requires she establish and follow a schedule to regularly check the appropriateness of all business activities. She may work in a large or small financial institution. In an industry frequently considered highly competitive‚ a bank auditor reviews the general and specific aspects of
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