DQ 1 Consider how an organization must manage cash‚ receivables‚ and inventory. Which of the three variables is the most important to manage? Is one more susceptible to fraud and errors than the others? Explain your answer. How would a misstatement in each affect the organization? Cash is the most important to manage‚ because it is what keeps the company going. According to Kieso‚ Weygandt‚ and Warfield (2007)‚ cash is the asset most susceptible to improper diversion and use (p. 315).
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assertions‚ but some of the assertions may be more effective to reach desired level of assurance by using test of details. iii. .11 Identifying potential misstatement: identifying potential misstatement depends on: 1. The nature of assertion .12 Analytical procedures may test for assertions in which potential misstatements would not be apparent from an examination of the detail evidence or in which detailed evidence is not readily available. 2. The plausibility and
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observation ¤ external confirmation ¤ inquiry ¤ reperformance ¤ recalculation ¤ analytical procedures. It is mandatory that the auditor should perform risk assessment for the identification and assessment of risks of material misstatement at the financial statement and assertion level‚ and the risk assessment procedures should include analytical procedures (ISA/HKSA 315(6b)). It is also mandatory that the auditor should perform analytical procedures near the end of
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Appointment‚ Duties‚ Rights and Liabilities of Auditor Appointment: First Auditors a) The first auditors of a company shall be appointed by the directors within 60 days of incorporation of the company [252(3)] b) The first auditors will hold office till the first annual general meeting [252(3)]. c) If the directors fail to appoint the first auditors‚ the members shall appoint the first auditors‚ provided further that the auditors such appointed shall not be removed during the tenure expect
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items included in the sample. Required 1. Identify the audit objectives that are accomplished by this test. 2. Determine sample size based on the following audit judgments. a. Tolerable misstatement is assessed at $325‚000. b. The risk of incorrect acceptance is assessed at 37 percent. c. Anticipated misstatement is assessed at $100‚000. 3. Develop a scenario that is consistent with setting the risk of incorrect acceptance at 37 percent. 4. Select a PPS sample of the above inventory population
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information and to ASA 330. ASA 330.7a states that the auditor‚ when designing further audit procedures shall ’consider the reasons for the assessment given to the risk of material misstatement at the assertion level for each class of transactions and account balance‚ including the likelihood of material misstatement due to the particular characteristics of the relevant class of transactions or account balance’. In other words this paragraph is referring to the inherent risk of the company. NOT RIGHT
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THE LAW OF BUSINESS ORGANIZATIONS Chapter 16 – Law of Sole Proprietorship and Partnership * Sole proprietorship – A business where the sole owner is responsible for the management and debts of the business. * Registration/licensing issues; Flexibility * Partnership – Partnership Act (Ontario) defines partnership as a relationship that subsists between two or more persons carrying on business in common with a view to profit. * Differences between partnership and co-ownership
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Independent Auditor AU 150‚ Generally Accepted Auditing Standards AU 311‚ Planning and Supervision AU 312‚ Audit Risk and Materiality in Conducting an Audit AU 314‚ Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement AU 315‚ Communications between Predecessor and Successor Auditors AU 318‚ Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained AU 326‚ Audit Evidence AU 508‚ Reports on Audited Financial Statements
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Bibliography: HBC Final Prospectus. Hudson Bay Company‚ Nov 21‚ 2012. HBC Supplementary Prospectus. Hudson Bay Company‚ Nov 21‚ 2012. [ 4 ]. HBC Final Prospectus. Hudson Bay Company‚ Nov 21‚ 2012. (pg.4) [ 5 ] [ 21 ]. 2011 Annual Reports. Target (pg 33. pg 50) [ 22 ] [ 24 ]. 2011 Annual Reports. Target (pg 37) [ 25 ]
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Question 1. Assessing the Fraud Risk Factors: High Risk factors and Low Risk Factors. High Risk Factors: 1. Management’s attitude towards overriding controls: Section 5‚ under topic Integrity and ethical values‚ of the questionnaire suggests that override could occur without management’s approval‚ manager’s override is not explicitly prohibited and no interventions by the management were observed. 2. The Degree of oversight related to the company’s control structure exercised by the management:
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