Case Analysis : Zzzz Best Company, Inc.

I believe that the term “engagement risk” implies that inherent client-specific risks face an auditor throughout the course of an audit, thus creating a risk that the auditor will be unable to successfully assess and manage these risks in the performance of the engagement and properly issue an appropriate opinion. The auditor must understand these client-specific risks, which include, but are not limited to, significant

Furthermore, when the internal control is fixed, the outside auditor can rely on the clients system and less audit testing can be conducted. When everything is improved, the management letter is given to the organization’s top management and not disclosed to the public, (Finkler, S. A., Ward, D. M., & Calabrese, T. D., 2013). Next, is the auditor’s report that entails the opinion letter usually written in three paragraphs and given to the board of trustees. Then, the opinion paragraph is added on to state the organizations financial statements are in accordance of the financial position and followed through with (GAAP). The clean opinion addresses the opinion of the auditor and the overall exercising of professionalism. Also, the complete opinion of the financial statements is to give a representation of the organization. All other opinions may be included and can be addressed by adverse opinions if (GAAP) was not in accordance. A qualified opinion can be added if a specific area wasn’t included in the financial statement when needed. Finally, the management reports are conducted by the management team and not the auditors. The management report is the annual report the topics included in the report are the internal control system and the responsibility of the audit committee.

5. What is the purpose of predecessor-successor auditor communications? Which party, the predecessor or successor auditor, has the responsibility for initiating these communications? Briefly summarize the information that a successor auditor should obtain from the predecessor auditor.

1. To provide the schedule for major portions of the audit, and the staffing requirements for the engagement.

Once you have read the case, answer the questions that follow the case text. I have reprinted the questions below to assist you in your answers.

They have significant differences. First, the auditor provides reasonable assurance about whether the financial statements are free from material misstatement due to error or fraud in an audit report, but provides limited assurance about whether the financial statements are free from material modifications in a review report. A few procedures are performed in a review engagement. (3) Second, a review report is conducted according to the standards of AICPA, while an audit report is conducted according to the standards of PCAOB. Moreover, review service is less cost than audit

The primary focus of this paper

The purpose of this paper is

The purpose of the predecessor-successor auditor communication is to inform the successor auditor of the nature of the industry and specific attributes of the client to help determine if the successor auditor wants to take them on as a client. It is the responsibility of the successor auditor, with the client’s permission, to initiate communication with the predecessor

4) What factors in the auditor-client relationship create a power imbalance in favor of the client? Discuss measures that the profession could take to minimize the negative consequences of this power imbalance.

This paper explores the ZZZZ Best Company which was begun by a 16 year old individual who was able to pull the wool over the eyes of many customers, investors and auditors. This paper will define the difference between review and audit when it comes to financial reports, comments on the procedures provided with regard to the management assertion of occurrence, verification of payments for jobs and how they can lead auditors to improper conclusion, the purpose of predecessor-successor auditor communications, as well as whom needs to initiate the communication and information that needs to be obtained. The paper also addresses the limitations of the confidentiality agreement and how and when

2. A) A client can be put in a more powerful position than the auditor in an auditor-client relationship if the auditor is trying to sell the client additional services.

The focus of this paper, therefore, is to look at the analysis of the book by Kecia Ali. It will look at some of the arguments that she has that leads her to make that conclusion. It will also include evidence to support them and its contributions to similar books in the field.

Auditors that are new to an engagement are obliged by law to get in touch with the predecessor auditor of the prospective client. This regulation facilitates the information gathering process of new auditors and can already

Introduction: Introduces the theory, purpose of the paper, and provides rationale for selecting the theory.