explanation. 1 2007 AICPA Newly Released Questions – Auditing 2. CPA-05466 A retailing entity uses the Internet to execute and record its purchase transactions. The entity’s auditor recognizes that the documentation of details of transactions will be retained for only a short period of time. To compensate for this limitation‚ the auditor most likely would: a. b. c. d. Compare a sample of paid vendors’ invoices to the receiving records at year-end. Plan for a large measure of tolerable misstatement in substantive
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corporation. Internal audit committee of Enron- Not only was the management of Enron under investigation‚ but the internal auditors of the company were being inspected as well. As internal auditors‚ they were responsible for controlling and analyzing the financial situations of the corporation. The simple fact that the Enron scandal happened proves that the internal auditors were not
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Operations 1. Wholesale Services 2. Energy Services 3. Global Services C. Enron’s Timeline D. Enron’s Role in The Energy Crisis in California E. The Fall of Enron F. Why Enron Fell from Grace? G. The Crash of Enron 1. Key Management at Enron 2. Enron’s Auditor 3. Credit Rating Agencies 4. Investment Banks 5. Links with The Government (Bush Administration) 6. The Link of Enron with The British Front 7. The Victim: Employees & Pension Fund Holders H. Investigators & Regulators Involved 1. Capital Market Regulatory
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civilization”. State your position with appropriate argument highlighting the functional‚ legal and social construct of the profession. 15 Introduction Auditors are responsible to provide an independent opinion on the true and fair view of the financial statements after he has acquainted himself with all the relevant and reliable evidences with the client. Auditor is expected to a professional adroit with sufficient proficiencies and competence to assess whether the view that has been portrayed by the financial
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successfully comply with the standards of GAAS. The auditors failed to exercise the fundamentals of the substantive audit plan which would have uncovered at least some of the fraud. Furthermore‚ this inability and lack of knowledge on how to properly execute an audit threatened the independence of management and internal auditors as well as the outside auditing firm. The first critical factor and a major component of GAAS is Rule 101 or “independence” of the auditor in all areas of the audit‚ which in the
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existence‚ third-party confirmations are usually highly reliable and auditors normally seek these out for a complete audit. While these forms of evidence can be reliable this isn’t always the case as such evidence can be direct or indirect. Direct third party confirmations are those that are mailed and received directly from the third party e.g. a bank confirmation or an account receivable confirmation mailed directly to the auditors. The indirect confirmation is less reliable since it passes through
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controversy over the role of the auditor with respect to the detection of fraud. There are different perceptions to the auditor’s duty regarding fraud. In today’s technological age‚ fraud has become very complicated‚ and increasingly difficult to detect‚ especially when it is collusive in nature and committed by top management who are capable of concealing it. Consequently‚ auditors have argued that the detection of fraud should not be their responsibility rather the auditor sees his duty as the independent
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papers advise auditors on the methodologies used and standards to be met when assuring that the accounting for losses based on contingencies rising from pending litigation are fairly represented on the financial statements. Section 337 accomplishes this by using a number of practices to guide the auditor. A detail of the accounting standards and explanations of the techniques in field work are the basis. These are supported by examples of letters & correspondences that an auditor can use‚ key
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response to a request for information made by the auditor. The request of the information can be both written and oral communications. According to Aldhizer and Cashell (2006)‚ the auditor controls the initial mailing of confirmation requests to the client’s banks‚ debts of their customers and others. Prasad (2007) described‚ that the purpose of the confirmation is to bring more credibility on the information that the auditors have in their control. The auditor will choose the confirmation procedure in order
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skepticism as a general duty of care that needs to be applied by the auditor throughout the duration of the audit engagement. Professional skepticism involves the auditor having a clear and questioning mind regarding the assertions that are presented by management or other client personnel. The auditor is instructed to not take the words or data presented by management as sufficient and appropriate audit evidence but rather the auditor needs to thoroughly audit the evidence with a questioning mind to
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