A BUSINESS RISK APPROACH Auditing 6e Larry E. Rittenberg University of Wisconsin–Madison Bradley J. Schwieger St. Cloud State University Karla M. Johnstone University of Wisconsin–Madison Australia • Brazil • Canada • Mexico • Singapore • Spain • United Kingdom • United States Auditing: A Business Risk Approach‚ 6e Larry E. Rittenberg‚ Bradley J. Schwieger‚ Karla M. Johnstone VP/Editorial Director: Jack W. Calhoun Publisher: Rob Dewey Acquisitions Editor: Matthew Filimonov
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balances are appropriately disclosed. Therefore of the 5 assertions and audit objectives listed above the 3 assertions applicable to direct test of cash balances are Existence‚ Completeness and Valuation. b) List 4 audit procedures to use in auditing cash. (4 marks) SOLUTION: Because of the large volume of transactions and the small account balance‚ the audit strategy is invariably to concentrate on verifying the account balance rather than the transactions. Moreover‚ because of the significance
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actually quite simple. First‚ privity of contract. Privity of contract means that the contract only applys to the people involved with contract‚ thus making the bank an innocent third party. The second defense is that Yost followed the proper auditing standards when conducting an audit. This means that if Yost were to find nothing‚ they would not be responsible. c. She will most likely win due to negligence. The company is responsible for implementing internal controls‚ and the president’s
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Arayawna Moore @02585360 Auditing I 09/20/10 CHAPTER 1 1-14 A. 3 B. 2 C. 2 D. 3 1-15 A. 2 B. 3 C. 4 D. 3 1-21 1) IRS‚ compliance audit 2) GAO‚ operational audit 3) CPA‚ operational audit 4) Internal‚ financial statement audit 5) GAO‚ operational audit 6) CPA‚ financial statement audit 7) GAO‚ financial statement audit 8) IRS‚ compliance audit 9) Internal‚ financial statement audit 10) IRS‚ compliance audit 11) Internal‚ financial statement audit 12) GAO‚ compliance
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materiality threshold for the engagement? 25. The Code of Professional Conduct derives its authority from the A) Securities and Exchange Commission. B) Bylaws of the American Institute of CPAs. C) Financial Accounting Standards Board. D) Auditing Standards Board. 26. The chief (internal) audit executive should have direct reporting access to the audit committee‚ and the committee should oversee the activities and budget of the internal audit function. A) True B) False 27. The AICPA Principles
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1.26 Value of auditing Required: Would you obtain an audit for this company? Explain the reasons for your decision. Yes‚ audits exist because of regulatory mandate (required by government). There are three theories which propose reasons why demand for audits might exist without regulatory mandate: 1. Agency theory (The focus of the agency demand for auditing is more related to the stewardship role of accounting- which is more an examination of what has happened.) The separation of ownership
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Records Disaster Prevention and Recovery 12. The typical contents of a records disaster prevention and recovery manual outline usually consists of nine parts. The first part is the introduction; the title page‚ preface‚ and table of contents are included in this. Also the overall policy for the disaster avoidance is in here. Everyone who participated in the program and making of the manual is mentioned. Part two explains methods on how to prevent or decrease the effects of a disaster. Part three
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Chapter 5 18. a. They should use the resistance of meeting auditing standards and contributory neglegence. Stuart Supply Company management is responsible for the fraud. The fraud was complicated and difficult to discover‚ but the steps recommended by Lauren Yost & Co made it possible. The president of Stuart Supply Company ignored the proposal to count the inventory on the same day‚ and was therefore responsible to breakdown of detecting the fraud due to his decision. Luckily‚ Lauren Yost & Co
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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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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
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