CHAPTER 15 Completing the Audit LEARNING OBJECTIVES 1 2 3 4 5 6 7 8 Describe the balance sheet account groups that the major revenue and expense accounts are associated with‚ and the substantive analytical procedures applied to audit revenues and expenses. Outline the overall analytical procedures to be performed at the final stage of the audit‚ including analysis of the income statement‚ the cash flow statement‚ financial statement presentation and disclosures
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Stages of Study and Evaluation of Internal Control The stages/activities involve in studying and evaluating internal control are: A. Obtaining an understanding of the entity’s internal control structure. B. Assessing the preliminary level of control risk. C. Obtaining evidential matter to support the assessed level of control risk. D. Evaluating the results of evidential matter. E. Determining the necessary level of detection risk. STAGE A. Obtaining an understanding of the entity’s internal
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Final Exam Review Practice Case IPI Case: Required: 1. Identify Accounting System Issues System implementation Lack of training I: people try to override the system‚ inaccurate reporting R: The company who installed the system needs to be contacted and hold training session for employees Glitches I: inaccurate reporting‚ create room for error R: Contact the company again and get them back and give them responsibility to fix the glitches 2. Identify Control Issues: Understaffing
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Case 11.1: The Runners Shop Relevant Guidance • AU 339 (SAS 103): Audit Documentation • Auditing Standard No. 3: Audit Documentation • International Standard on Auditing 230’ (Revised) (Site -http://irba.co.za/documents/doc_00535.pdf ) Questions 1] Describe the purposes of audit documentation and explain why each purpose is important. According to AU 339.03‚ “audit documentation provides the principal support for the”: (a) “representation in the auditor’s report
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According to Paragraph 4 of Auditing Standard No. 3 (PCAOB 2004)‚ “The auditor must prepare audit documentation in connection with each engagement conducted pursuant to the standards of the PCAOB. Audit documentation should be prepared in sufficient detail to provide a clear understanding of its purpose‚ source‚ and the conclusions reached. Also‚ the documentation should be appropriately organized to provide a clear link to the significant findings or issues.” Referring to Paragraph 4‚ the audit
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SOLUTIONS MANUAL to accompany MODERN AUDITING & ASSURANCE SERVICES 3rd edition Prepared by Philomena Leung‚ Paul Coram and Barry Cooper © John Wiley & Sons Australia‚ Ltd 2007 Chapter 1 Auditing‚ assurance and the public accounting profession Review questions 1.1 How does an expanded role of professional accountants affect the accounting profession? The expanded role of professional accountants has affected the accounting profession‚ in
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services you could obtain from a certified public accountant. These are referred to as compilation‚ review‚ and audit. There are significant differences between the objectives of an audit of financial statements in accordance with generally accepted auditing standards and the objectives of a review in accordance with statements on standards for accounting and review services. The objective of an audit is to provide a reasonable basis for expressing an opinion regarding the financial statements taken
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Chapter 3—Security Part I: Auditing Operating Systems and Networks TRUE/FALSE 1. In a computerized environment‚ the audit trail log must be printed onto paper document. 2. Disguising message packets to look as if they came from another user and to gain access to the host’s network is called spooling. 3. A formal log-on procedure is the operating system’s last line of defense against unauthorized access. 4. Computer viruses usually spread throughout the system before being detected. 5. A
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SOLUTIONS FOR REVIEW CHECKPOINTS 1.1 Business risk is the collective risk faced by a company that engages in business. It encompasses all threats to and organization’s goals and objectives. It includes the chance that customers will buy from competitors‚ that product lines will become obsolete‚ that taxes will increase‚ that government contracts will be lost‚ or that employees will go on strike. 1.2 The conditions of complexity‚ remoteness‚ time-sensitivity‚ and consequences increase demands
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Uses of Information Technology to Auditing…………………………………………….15 2.3 Audit Process…………………………………………………………………………………………………………………16 2.4 Audit Opinion and CAATS………………………………………………………………………………………………22 2.5 Impact of a computerized system on the Audit Process……………………………………………….26 2.6 Knowledge and Experience………………………………………………………………………………………….28 2.61 Audit Documentation………………………………………………………………………………………………….29 2.7 Information Technology and the development of Computer Auditing………………………….31
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