AUDITING THEORY 8. Which of the following should an auditor do when control risk is assessed at the maximum level? A. Perform fewer substantive tests of details. B. Perform more tests of controls. C. Document the assessment. D. Document the internal control system more extensively. 9. Which of the following is least likely to be a test of a control? A. Inquiries of appropriate personnel. B. Inspection of management’s engagement letter. C. Observation of the application of a policy. D.
Premium Auditing Audit Internal control
– Skills Module‚ Paper F8 (UK) Audit and Assurance (United Kingdom) 1 (a) (i) Importance of reporting to those charged with governance June 2013 Answers In accordance with ISA 260 (UK and Ireland) Communication with those charged with governance‚ it is important for the auditors to report to those charged with governance as it helps in the following ways: (1) It assists the auditor and those charged with governance in understanding matters related to the audit‚ and in developing a constructive
Premium Auditing Internal control Audit
Q1 - What is the relationship between the risk assessment process and the collection of audit evidence? The risk assessment process happens at the very beginning of the engagement and is to determine the level of risk present in the company. The risk assessment phase is when the auditor assess the client’s situation‚ conducts an independence threat analysis and decides whether to accept the client or not. The risk assessment is influenced by various factors such as the degree to which external
Premium Auditing Financial audit
effect on audit fees and market liquidity: a natural experiment. Premalata Sundaram* PDBP 2010 University of Florida August 23‚ 2010 Abstract Since the passage of the Sarbanes-Oxley Act (SOX) of 2002‚ a large body of evidence has accumulated on the costs this legislation has imposed on public companies in the United States. Estimates of the direct costs of the law have been fairly straightforward to measure‚ but the indirect costs of the legislation like incremental audit and non-audit
Premium Auditing Internal control Audit
OPERATIONAL AUDITING: ACCT 476 / CCAU 525 Internal Auditing in Not-For-Profit Organizations TABLE OF CONTENTS ABSTRACT: .....................................................................................................................................................................2 INTRODUCTION ..............................................................................................................................................................2 SECTION I: CORPORATE GOVERNANCE
Premium Internal audit Auditing Non-profit organization
456 Chapter Eleven Appendix 11B Illustrative Audit Case: Keystone Computers & Networks‚ Inc. Part III: Substantive Tests—Accounts Receivable and Revenue This part of the audit case illustrates the manner in which the auditors design substantive tests of balances. The substantive tests are illustrated for two accounts—receivables and revenue. This aspect of the audit is illustrated with the following audit documentation: • ABC’s risk assessment working paper that combines the auditors’ assessments
Premium Accounts receivable Revenue
the circumstances and opinion expressed by an auditor‚ where he is unable to obtain sufficient audit evidence. 2. Auditors of M/s Santa Banta (P) Ltd. were changed for the accounting year 2010-11. However there was no change in the position of closing stock which remained at ` 400 lacs . The auditors of the company propose to exclude the audit of closing stock of ` 400 lacs from their audit programme on the understanding that it pertains to the preceding year which was audited by another
Premium Auditing Financial audit Internal control
Introduction Self-regulated: the standards governing audits were established by members of the profession themselves Sarbanes-Oxley Acct of 2002 Created: Public Company Accounting Oversight Board (PCAOB) to provide external and independent oversight over the audits of public entities Responsible for registering public accounting firms‚ establishing standards for audit engagements‚ and inspecting the quality of audits conducted by public accounting firms ****Generally Accepted Auditing Standards (GAAS)****
Premium Auditing Internal control Audit
involves "a public responsibility transcending any employment relationship with the client." The auditing profession exists to serve the users of an organization’s financial statements. These include lenders‚ investors‚ management‚ government‚ and (indirectly) all individuals who are ultimately affected by the integrity of the financial reporting process. Auditors need to remember that they are serving the public interest and not the interests of client management. 1-2. The audit opinion formulation
Premium Auditing Audit Internal audit
Accounting Education: an international journal Vol. 20‚ No. 2‚ 203– 222‚ April 2011 Adding Value to Audit Education through ‘Living’ Cases JULIE DRAKE University of Huddersfield‚ UK Received: November 2009 Revised: July 2010 Accepted: September 2010 ABSTRACT This paper seeks to address the perceived failure of university teaching to foster critical understanding of audit practice and to identify a potential remedy. It contributes to the debate (Maltby‚ 2001‚ “Second thoughts about ‘Cases in
Premium Auditing Audit Case study