Auditing Chapter 3 Homework 3-27 a. These are the items that should be included in the auditor’s report: 1. Normal receivable confirmation procedures‚ although not used‚ should not be listed here since it was not material‚ and the auditor was able to gain a satisfactory opinion from the client’s use of them. 2. The change in the accounting method for long-term construction doesn’t need to be included here since it is discussed in the footnotes. 3. Lawsuits are normally included
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evidence should be persuasive‚ rather than convincing. There are different levels of reliability of audit evidence‚ some providing more evidence than others. There are nine types of audit evidence : 1) Mathematical Recalculation 2) Inquiry 3) Re-performance 4) Analytical Procedures 5) Documentation (inspection of) 6) Confirmation 7) Observation 8) Physical Inspection of Assets 9) Scanning Nature of Evidence • Evidence is any information used by the auditor to determine whether
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Brham S. Inocencio BSA IV-A CASE 01 – Enron Corporation 1. List three types of consulting services that audit firms have provided to their audit clients in recent years. For each item‚ indicate the specific threats‚ if any‚ that the provision of the given service can pose for an audit firm’s independence. In the recent years‚ auditing firms provides the following consulting services to their clients: a. Internal auditing b. Design of accounting systems c. Various types of Information Technology
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Chapter 1 Assurance Services The broad range of information enhancement services that are provided by CPAs There are two types: -Increase reliability of information -Putting information into a form or context that facilitates decision making Types of Services Assurance Services -Attestation Services Example: Audits of Financial Statements‚ Examinations of Internal Control -Other Assurance Services Example: CPA ElderCare Prime Plus Services Non Assurance Services -Tax Services -Management
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Solutions for the Biltrite Bicycles Inc. Case Module I - Assessment of Inherent Risk 2 Module II – Assessment of Control Risk 16 Module III - Control Test: Sales Processing 28 Module IV - PPS Sampling: Factory Equipment Additions 30 Module V - Accounts Receivable Aging Analysis 34 Module VI - Sales and Purchases Cutoff Tests 41 Module VII - Search for Unrecorded Liabilities 46 Module VIII - Dallas Dollar Bank Reconciliation 48 Module IX- Analysis of Interbank Transfers 51 Module X -
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AUDITING IN A CIS ENVORONMENT With the introduction of computers‚ conventional accounting systems and methods using papers‚ pens and abacuses have undergone drastic changes‚ therefore exerting a great impact on internal control and audit trails in following audit procedures. Also‚ the introduction of computer has brought an immense increase in the availability of electronic resources. My topic is entitled auditing in a Computerized Information System (CIS). One purpose why this topic is included
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“Accounting did not cause the recent corporate scandals‚ unreliable financial statements were the results of management decisions‚ fraudulent or otherwise”. (Lin & Wu‚ 2006‚ para. 5) Waste Management‚ HealthSouth‚ Enron‚ Satyam and Madoff are just a few names that come to my mind when I think of fraudulent accounting. Disguised loans‚ inflated income‚ improper accounting and misstated earnings‚ different words all describing the same thing‚ FRAUD. Fraud affects the company‚ the consumers
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Auditing Theory 1. A control which relates to all parts of the EDP system is called a(n) a. Systems control c. Applications control b. General control d. Universal control 2. Which of the following is not an output control? a. Proper authorization of transaction b. Control totals c. Check digits d. Adequate documents 3. Should the auditor feel‚ after obtaining an understanding of the EDP internal control structure‚ that control risk cannot be reduced‚ he or she will a. Issue a disclaimer b. Issue
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Ethical Dilemmas for Auditors Discussion Paper May 2006 1 The Institute of Certified Public Accountants in Ireland Ethical Dilemmas for Auditors Dilemma One – Non-Audit Services 3 Dilemma Two – Fee Levels 6 Dilemma Three – Ethics Partner 7 Dilemma Four – Long Association with the Audit Client 8 Dilemma Five – Commencement in Practice 9 Dilemma Six – Financial Interest in a Client 10 Dilemma Seven – Business relations with audit clients 11 Dilemma
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Q: “Auditing begins where accounting ends. State points of difference between accounting and auditing? “Auditing begins where accounting ends” Accounting is a process of maintaining business records. Joint stock companies are required by law to maintain proper record of business transactions. Maintaining books of accounts and preparing financial statement is a prime responsibility of directors. The shareholders are ambitious to see that their investment is safe. It is therefore imperative
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