Essay on Discussion Questions Ch 7,8,9

True or False: A permanent magnet is a piece of material that has been magnetized and can hold its magnetic strength for a reasonable length of time. True.

The audit committee’s role in financial reporting is to ensure that accurate and transparent disclosure is being presented to the public, investors, and shareholders. The role of top management in financial reporting is to make sure that the financial statements and disclosures are in accordance to GAAP, and that everything disclosed is truthful, while not hurting the business. The

During Hydromaint's audit, you and Pam had a number of discussions. You, Pam, and Mike Johnson are generally satisfied that the accounts are in accordance with GAAP and are supported by underlying facts. Pam tested Jerry's pension accounting (which she found to be correct) by preparing a pension worksheet based on data contained in the actuary's report:

4. Additional testing may still be required even if the error is corrected by the client. Many other errors during the month of April could have occurred on the accounting clerk’s watch that the auditor needs to do further testing to be sure no material misstatements are present. Some of these testing could be seeing what other duties the accounting clerk had during that month. Checking the client’s internal control for the entire entity could also be necessary to ensure that controls are in place for training employees that may need to fill the roles of a peer.

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.

A cell is subject to hypoxic conditions for 20 minutes, then observed under the microscope. The

The auditor must review disclosures for adequacy, and if the auditor concludes that information disclosures are not reasonably adequate, the auditor must state so in the auditor’s

Many business owners must examine what is at risk when they communicate sensitive data over email. The first thing is to make sure that a good virus protection software is install and updated on everyone computer place. Second it is good that all key departments within the organization, such as legal IT and H, understand the policies; require them to sign off on the email filtering, retention, retrieval and analysis policies (Small Business Computing Staff, 2011).

Auditors have the responsibilities as well as management to report internal controls. The auditors must examine closely management’s claim of effectiveness and also physically test the controls. After the examination, the auditors should express their opinion and any recommendations to fix any internal control weaknesses.

2. Auditors are required to consider evidence obtained and accumulated throughout the audit and make an overall evaluation as to whether substantial doubt exists with respect to the ability of the client

o The auditors should have done further testing should have been performed to discover the

* To reassess the identification and measurement of the acquiree’s identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the business combination if the acquirer’s interest in the net fair value of the items recognised exceeds the cost of the combination. Any excess remaining after that reassessment must be recognised by the acquirer immediately in profit or loss.

Furthermore, according to GAAS, AU-C 300.06-07, Ernst & Young should have planned and performed further audit procedures whose nature, timing, and extent are based on, and are responsive to, responsive to the assessed risks of material misstatement. While designing the further audit procedures, Ernst & Young should have obtained audit evidence to determine whether the controls are operating effectively. If the auditors assess higher control risk, the more persuasive audit evidence is required.

An important function of the accounting field is to provide external users of financial statements with assurance that the financial information being presented is both reliable and accurate. This basic function of accounting is so important that there is an entire field of experts, called auditors, dedicated to assuring its proper performance. Throughout history there have been many instances in which the basic equilibrium between an institution and current/potential investor has been threatened due to a lack of accountability and trust between the two parties. This issue has been the catalyst for many discussions regarding the proper procedures a firm should follow in order to provide

As a new auditor for the CPA firm of Croix, Marais, and Kale, you have been assigned to review the internal controls over mail cash receipts of Manhattan Company. Your review reviews the following: checks are promptly endorsed “For Deposits Only”, but no list of the checks is prepared by the person opening the mail. The mail is opened either by the cashier or by the employee who maintains the accounts receivable records. Mail receipts are deposited in the bank weekly by the cashier.