UNIVERSITY OF NAIROBI
Principles of auditing term paper
GROUP 3
NAME REG. NO
1. KINUTHIA ROSEMARY D33/2395/2011
2. OMONDI BRADLEY D33/2389/2011
3. KEMUNTO DOLLY D33/2375/2011
4. MENGICH NOAH D33/2460/2011
DECLARATION
We declare that this assignment is our original work and has not been submitted elsewhere for examination, award of a degree or publication. Where other people’s work, or our own work has been used, this has properly been acknowledged and referenced in accordance with the University of Nairobi’s requirements
KINUTHIA R.W. D33/2395/2011 …………………….
MICHIRA D. K. D33/2375/2011 …………………….
OMONDI B.O. D33/2389/2011 …………………….
MENGICH N.K. D33/2460/2011
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d) Does the prospect pay their professional service providers in a timely manner?
2) Does the prospective client’s management team meet your firm’s standards of integrity? As an integral part of most engagements, the CPA will be relying on the management of the prospective client to provide meaningful disclosures and representations. Especially for tax and audit engagements, ask yourself these questions:
a) Does the business/leadership team have a history of enforcement/criminal actions?
b) Does the prospect pay its bills/honor its agreements?
c) Does the prospective client have a litigious nature, either as a plaintiff or defendant?
d) What is the reputation of the firm and its leadership team?
Upon evaluation of the client, various investigative red flags may arise. They include;
a) Frequent changes of professional service providers. Could mean a firm is opinion shopping.
b) Poor financial history. Prior failed business or bankruptcy could indicate a person who takes unjustifiable risks.
c) Work/ Business History. Unstable address, employment or professional history.
d) Overly litigious as a plaintiff or defendant. Signals a party who is not afraid to sue, presents a risk of non-payment or who may not honor their agreements.
e) High turnover in upper management. Often indicates lack of internal stability.
f) Short operating history. Where were the principals before they were at the current firm?
g)
Client must be honest and legit. Attorney will advance all "costs" in connection with Attorney's representation of Client under this agreement. Attorney will not settle Client's claim without the endorsement of Client. Client may release Attorney whenever by composed notice. Attorney may withdraw at any time as permitted under the
(2) Where in private practice he served as lawyer in the matter in controversy, or a lawyer with whom he previously practiced law served during such association as a lawyer concerning the matter, or the judge or such lawyer has been a material witness concerning it;
(3) Please explain why the parties are not referred to as the ‘plaintiff’ and the ‘defendant’?
Preliminary analysis to understand the client‘s business and risk - Understanding the auditee’s business, environment, and risks
Describe how you would conduct the audit process, incorporating the analytical procedures you would use to investigate selected business transactions?
LCC has conducted an audit of Apollo Shoes, Inc. balance sheets, the retained earnings, cash flows, and other related statements of income for the year ended December 31, 2006/2007. Apollo Shoes Inc management is responsible for maintaining the effective internal controls that goes along with the financial statements and how well the accuracy is going to be. LLC has evaluated the effectiveness of the said controls and with everything to see the relevance in the timing, the substantive in quality, and the comprehensive in nature. The responsibility of our firm is to express an opinion that is supported by audit evidence in
potential conflict concerns and interests – the involvement of the profession in complaint proceedings against lawyers, or paralegals, however well-intentioned and fair, would always be suspect because
Does the candidate have all required licenses and comply with applicable laws regarding that business.
"The lawyer's situation is different from that of other professionals. The lawyer is vulnerable to some moral criticism that does not as readily or as easily attach to any other professional." This statement acknowledges that lawyers are faced with a variety of issues that many other professional do not have to cope with. Wasserstrom also considers the fact that in many situations lawyers have the optional ability to remove themselves form issues that may contradict their individual ethics. "Having once agreed to represent the client, the lawyer in under an obligation to do his or her best to defend that person at trial." With in the process of contracting a lawyer, the lawyer has the option of acceptance or refusal of representing the client. Therefore the lawyer can asses the case and decide if it violates any of their own individual ethics.
Q4)Some might describe Williams as “financially distressed.” What evidence is there that Williams’ business may be compromised as a result
• Directing appropriate attention to the different areas of the audit such as assessing materiality, so that when the detailed audit plan is prepared, audit procedures can be directed towards the material amounts.
indicates a negative judgement o the client will serve only to diminish the probability of cooperation
The aim of this report is to develop an audit plan using the 2007/2008 annual reports of the WesFarmers. This report will provide an understanding of the underlying concepts of an overall audit strategy. This strategy will bring forward the direction and scope of the WesfFarmers audit plan. This report will address five major points these are as follows:
The marketing auditor may play a more critical role in auditing the company’s task environment. The task environment consists of markets, customers, competitors, distributors and dealers, suppliers, and marketing facilitators. The marketing auditor can make a contribution by going out into the field and interviewing various parties to assess their current thinking and attitudes and bringing them to the attention of management.
When engaged in auditing a public firm, such as Apollo Shoe Inc., an auditor must determine when to trust in the company’s internal controls and when to ascertain auxiliary testing methods are obligatory to analyze control risks. The sales and collection cycle is rather a substantial fraction of the audit because this unique segment employs a multitude of documentation and records ranging anywhere from customer and sales orders, shipping documents, credit memos, and general journal entries; therefore, a working