Case 4-1 KBC Solutions

Your audit client, Beacon Ltd has proposed that your audit firm take up a consultancy project to evaluate several possible new accounting system, and provide advice on which system should be selected, as well as oversee the installation of the new system. Which of the following threats would be created if the consultancy project proposed by Beacon Ltd is accepted by your audit firm?   Question 6 options:   1)  Advocacy   2)  Familiarity   3)  Self-review   4)  Intimidation

Q2. Consult Paragraphs 3-6 of Quality Control Standard No. 20 (QC 20). Considering the example in the Waste Management case, please explain why a review by the practice director and audit division head is important in the operations of a CPA firm. In your opinion, was this review effective at Waste Management? Why or why not? Q3. Consult Paragraph 7 of PCAOB Auditing Standard No. 13. Do you believe that Andersen’s final decision regarding the PAJE’s was appropriate, under the circumstances? Would your opinion change if you knew that all of the adjustments were based on subjective differences (such as a difference in the estimate of the allowance for doubtful accounts), as compared to objective differences (such as a difference in the account receivable balance of their biggest customer)? Q4. Refer to Sections 203 and 206 of SARBOX. How would these sections of the law have impacted the Waste Management audit? Do you believe that these sections were needed? Why or why not?

Pls answer on your own words

Describe one professional experience in which you used evidence as the basis for decision making and one experience in which you made a decision without evidence for support. For each of the situations described, explain how the use of evidence (or the lack of it) impacted the outcome of your decision making. Be specific in terms of positive and negative impacts.

Please explain in detail

Question 6 Which ONE of the following best describes professional scepticism? An auditor should: A After obtaining an explanation from a client always confirm this with another member of staff B Not believe anything that management tells him/her, without speaking to a third party C Apply a questioning mind to the information and evidence he/she obtains D Always consider the worst outcome H 111

Victoria Lilly is a practicing CPA. A long-time audit client has asked Lilly to design and implement a computer-based accounting information system. The fees associated with this opportunity are very attractive. However, Victoria is concerned that she will not be able to maintain objectivity in future financial statement audits if she was responsible for the design and implementation of the client's accounting system. Furthermore, Victoria knows that professional standards require her to remain independent in "fact" and "appearance" from her auditing clients.1. In regards to financial statement audits, what is the difference between independence in "fact" and independence in "appearance"?2. Why do professional standards require that an auditor remain independent of their audit clients?3. Do you believe that Victoria can accept the engagement to develop the client's accounting system and still remain independent? (Support your answer)

KPMG is the auditing firm for Tech Corporation, a listed computer software company. The audit team assigned to perform the audit includes an Audit Manager, a Senior Auditor and three Audit Assistants. No member of the team has updated their knowledge or experience on IT or the business processes of an IT company. Based on the given scenario answer the following question numbers 29, 30 and 31: What is the appropriate course of action in the given situation? O a. KPMG should file for bankruptcy and close their auditing firm O b. KPMG should place team members who has updated knowledge and skills in IT business processes O c. KPMG should file a complaint against Tech Corporation O d. KPMG should complete the audit engagement with the current audit team

S1: Assurance engagements performed by professional accountants are intended to improve the operating efficiency and effectiveness of the responsible parties.S2: An auditor is required to understand all the aspects of internal control of the client. Group of answer choices Only S1 is correct. Both S1 and S2 are incorrect. Only S2 is correct. Both S1 and S2 are correct.

•Read the text below and fill in the missing words, making your choice from the words given. You will not need to use all the words. •WORDS AS OPTIONS •Internal, threat, profession, revision, demands, sensitive, future, power, interest, promise, reject, accountability, dynamic, mend, mechanism, competence, changing, mobile, needs, role, expectation, groups, social and society. Text/Passage •The audit is a …(a).. control…(b)..for securing the …(c)..of the company and its directors. The audit function is a product of the …(d)..of …(e)..and as such it is a …(f)..not a static one. The profession must continue to be …(g)..to the …(h)..needs of the various…(i)..groups. The emergence of the kind of …(j)..gap to which reference has already been made, represents a potential …(k)..to the future of the …(l).. As auditors and the apparent users of audited financial statement change, society may …(m)..roles formerly considered acceptable. Professional groups, such as auditors, must continually be…

Amjad is an auditor discussing the results of analytical procedures with the management, Amjad should not accept management's explanations at face value, and should obtain corroboratory evidence for the explanations offered. This is an example of O a. Professional skepticism O b. Professional ethics Oc. Conduct of an audit accordance to ISAS O d. Professional judgement

Assume your firm has decided to move forward. Referring to your evaluation of internal and external factors. explain why it would be appropriate for the external audit team to accept the client audit request. using examples to support your response

Please help me with this case... thank you!!

If auditor maintains high degree of independence, it will result in _________ a. Attention of media b. Good relationship with the client c. Greater reliability of financial statements d. Goodwill of the audit firm

Audit and assurance standards recognize the vital importance of performing audit and assurance activities with proficiency, due professional care and objectivity.  Cynthia Cooper, WorldCom whistleblower and internationally recognized expert on ethics and leadership in an interview (https://www.cfo.com/human-capital-careers/2008/02/worldcom-whistle-blower-cynthia-cooper/) on ethics stated, "I think we have to do our best not to forget what we've been through and hold tight to the positive changes in corporate governance that so many people have worked to achieve. Question A:  If Management is pressuring an internal auditor to look the other way, explain how the internal audit and assurance professional standards can help in this situation. Question B: In the article, she states, "My feelings changed from curiousity to discomfort to suspicion based on some of the accounting entries my team and I had identified, and also on the odd reactions I was getting from some of the fiannce…

The manager Concerned about her current customer base, manager Andersen started to think of factors that might affect the attractiveness of an auditing firm. Of course, the service quality provided and the fees charged by the auditor seem two important factors. Next, she decides that the reputation of the auditing firm also needs to be included in the framework as an independent variable. As illustrated by the dramatic effects of recent auditing scandals, reputation seems especially important for large auditors (i.e., auditing firms that are large in size). Finally, manager Andersen also thinks that the proximity of the auditing firm to the customer is another variable to be included as an independent variable. Proximity very likely affects the possibility for the client to personally meet with the auditors on a regular basis and she knows from her own contact with customers that they perceive personal interactions as quite important. Required: Identify variables (IV, DV, Moderating…

Please solve all questions please

If you were Sarah, how would you respond to each question?  For each of the following procedures taken from the quality control manual of a CPA firm, identify the applicable element of quality control from  A. All potential new clients are reviewed before acceptance. The review includes consultation with predecessor auditors and background checks. All new clients are approved by the firm management committee, including assessing whether the firm has the technical competence to complete the engagement. B. The partners accept responsibility for leading and promoting a quality assurance culture within the firm and for providing and maintaining a quality assurance manual and all other necessary practical aids and guidance to support engagement quality. C. Each office of the firm shall be visited at least annually by review persons selected by the director of accounting and auditing. Procedures to be undertaken by the reviewers are illustrated by the office review program. D. Appropriate…

S1: Audit debriefing process should be led by the audit manager.S2: An audit benefits the public. Group of answer choices Only S2 is correct. Only S1 is correct. Both S1 and S2 are incorrect. Both S1 and S2 are correct.

Identify how each of the following statements relates to the performance principle by considering which element(s) of the principle are related to that statement. (A statement may be related to more than one element.) Use the following elements in providing your response: Reasonable assurance • Planning and supervision • Materiality ⚫ Risk assessment • Audit evidence a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. b. Obtaining an understanding of the client's business and industry. c. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. d. Obtaining confirmations from the client's customers as to the ending balances in accounts receivable. e. Preparing a written audit plan. f. Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. g. Considering the likelihood that the account balance contains a material…

6. Risk assessment most commonly focuses on two criteria - impact and likelihood. As an organization's risk assessment process evolves, what other criteria might be valuable to consider and why? 1. They should also consider changes in the process since the last audit because that will help them better understand impact and help answer questions about what caused the issue.

3   All of these steps will help an auditor minimize litigation risks when performing the audit work, except ___________   Question 3 options:   a)  Have enough legal fees ready    b)  Maintain proper documentation and working papers   c)  Maintaining independence   d)  Perform quality audit work