In the aftermath of corporate scandals and the passage of the Sarbanes-Oxley Act of 2002 (SOX)‚ the audit committee is vested with greater authority to oversee fi nancial reporting and the appropriation of assets. As a result‚ the audit committee is responsible for adequate supervision and reporting and for responding to: • fraud in a fi nancial statement audit; • actual‚ perceived or potential confl icts of interest; • anonymous tips and complaints; and • through interaction with general
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Hoang Thi Thanh Ha – 13200154 Auditing Assignment 2: 1.What are the factors to consider Inherent Risk? Inherent risk is a measure of the auditor’s assessment of the likelihood that there are material misstatements in a segment before considering the effectiveness of internal control. Factors affecting assessment of inherent risk include: Nature of the client’s business : Industry practices Non-routine transactions Makeup of the population Audit experience : Results of previous audits Initial vs
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effective governance is established (University of Nebraska-Lincoln‚ 2015). With these responsibilities accomplished‚ the users have assurance that the financial information is reliable. The auditor’s main responsibility is to detect any material misstatements that may have been found within the financial statements. The auditor will use the Generally Accepted Auditing Standards as a framework for the audit. Some strategies for completing the audit are first to obtain sufficient evidence to support
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through an engagement letter. The understanding‚ and the letter‚ should include the auditor’s responsibilities‚ including the fact that an audit is designed to provide only reasonable assurance of detecting material misstatements‚ and therefore may not necessarily detect all misstatements that exist. 5. Management representation letter. Management’s statement that there have been no communications from regulatory agencies concerning noncompliance with or deficiencies in financial reporting practices
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FRAUD VS. ILLEGAL ACTS WHAT IS THE AUDITING DEFINITION OF FRAUD AND ILLEGAL ACTS? DEFINITIONS Fraud: Fraud is an intentional act that results in a misstatement in financial statements that are the subject of an audit (AU-C 240.11) ILLEGAL ACTS: Illegal acts‚ in the context of auditing‚ is referred to Noncompliance. Noncompliance is “acts of omission or commission by the entity‚ either intentional or unintentional‚ which are contrary to the prevailing laws or regulations‚” AU-C 250.11
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ete term (e.g.‚ Internal Revenue Service). A A Misstatement is Inconsequential If a reasonable person would conclude after considering the possibility of further undetected misstatements that the misstatement either individually or when aggregated with other misstatements would clearly be immaterial to the financial statements. If a reasonable person could not reach such a conclusion regarding a particular misstatement‚ that misstatement is more than inconsequential. Abatement complete removal of an amount due
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Guarantee DESCRIPTION FOR THIS STUDY GUIDE: Resource: Modern Auditing Prepare written answers to the following assignments: • Ch. 16: Comprehensive Question Control Activities in Payroll Processing • Ch. 16: Comprehensive Question Potential Misstatements/Tests of Controls – Payroll 16-33 16-35 ACC 492 Week 2 Assignments from the Text Study Guide www.paperscholar.com DIRECT LINK TO THIS STUDY GUIDE: http://www.paperscholar.com/acc-492-week-2-assignments-from-the-text-study-guide/
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Multiple Choice Questions Fraud and Error 1. Material misstatements may emanate from all of the following except a. fraud b. limitations of the audit c. error d. noncompliance with laws and regulations 2. An intentional act by one or more individuals among management‚ employees‚ or third parties which results in misrepresentation of financial statements refers to a. error c. fraud b. noncompliance d. illegal acts 3. The responsibility for the detection and prevention of errors
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low inherent risk should:Answer | | | | | Selected Answer: | increase the tolerable misstatement for the area. | Correct Answer: | increase the tolerable misstatement for the area. | | | | | * Question 2 6 out of 6 points | | | The five steps in applying materiality are listed below in random order. 1. | Estimate the combined misstatement. | 2. | Estimate the total misstatement in the segment. | 3. | Set preliminary judgment about materiality. | 4. | Allocate preliminary
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ASSIGNMENT on IPO PROCESS OF BANGLADESH Course Title: Financial Institution and Market Course Code: FIN 335 Submitted to Md Lutfur Rahman Assistant Professor East West University Date of Submission- August 1‚ 2012 Submitted by Subha Sayeed 2010-1-10-082 Md. Shazzad Hossain 2010-1-10-183 (Sec-3) Sharmin Sultana 2008-3-30-047 Sazzad Khan Mahmud 2009-2-10-107(Sec-3) LETTER OF TRANSMITTAL August 1‚ 2012‚ Md. Lutfur Rahman Assistant Professor East West University
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