Auditing And Assurance Standards

Appendix A.2 also lists several factors that could provide opportunities for management/employees to commit fraud. One factor that could lead to fraud is if, “There is ineffective monitoring of management as a result of: domination of management by a single person or small group without compensating controls.” The auditors should have taken notice of the lack of controls and segregation of duties with respect to Phar-Mor’s

"In applying analytical procedures as risk assessment procedures, the auditor should perform analytical procedures relating to revenue with the objective of identifying unusual or unexpected relationships involving revenue accounts that might indicate a material misstatement, including material misstatement due to fraud. Also, when the auditor has performed a review of interim financial information in accordance with AU sec. 722, he or she should take into account the analytical procedures applied in that review when designing and applying analytical procedures as risk assessment procedures."

Compare the primary auditor objectives in auditing historical financial statements to auditing internal controls over financial reporting. Identify at least two (2) objectives that are the most significant in reducing the risk of reporting errors or misstatements in financial statements. Provide a rationale for your response.

It’s no secret that we all have sex. Every person grows up as an individual, learning things about themselves as they go along, as well as learning about others. We all eventually end up calling someone else our significant other, whether it be of the same sex or not, and we all end up making personal decisions about our sexual identity and actions as we progress through life. We define our sexual identities of something unique to only us and we acquire our identities with a mix of influences: biological, psychological, social, cultures, values, and society in the time in which we are growing up. After such influences, we make the choice when to lose our

This study includes the results from the three participants, Mathew, Mark and Luke. The figures will be represented by the X- axis, which will show the sessions, and the Y-axis, which will display the number of times the participant engaged in the vocal stereotypy during the sessions. All data from the IOA agreement was calculated for 25% of each participant and will be included within the recoding. The ESE teacher was the second observer and was trained in all aspects of the study to assist with procedural fidelity. Social validity was taken into consideration by the results rendered from the parent’s observation and recordings.

CAS 300 requires auditors to their audit using a risk based model where the nature, timing and extent of audit procedures are based on the assessed risk of material misstatement. Pickett (2006) argues that for audits to be effective and efficient, much of the audit effort should be focused on areas that are considered to pose the highest audit risk. Additional audit procedures should be linked to individual audit assertions whereas other audit procedures need to be performed as and when needed. Thus, for an audit plan to be put in place, it is necessary for an auditor to come up with a risk profile of the client comprising an understanding of the business operating by the audit client, assess business risk and also perform its preliminary analytical review.

Delegation of authority is the act of assigning powers or authority to another entity. In this paper, I will summarize a situation where I experienced delegation of authority, and explain how it correlates to the content of Chapter Six, (Bagley & Savage, 2010).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate (Louwers & Reynolds, 2007). We believe that the audit evidence obtained is sufficient and appropriate to provide a reasonable basis for our opinions.

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.

Due to the fact that auditors perform the interim procedures over the operating effectiveness testing in all of the three risks, auditors are required by PCAOB to perform the roll-forward of controls. Depending on some factors, auditors should consider the nature, length and extent of the roll-forward procedures. A specific

Performing internal tests of controls is intended to assess the operating effectiveness of those internal controls. Here the staff would select an area of control to test, perhaps inventory management and return policy. They would then look at the procedures that help prevent fraud or error, talk to management, and observe activities. They would notice there is very little control in place for this area. There is no management oversight or dock security measures, no direct recording of sales receipts, shipping labels, or matching to accounts receivable. This would be noted as an area of additional concern. The next stage is to perform substantive testing procedures, where the purpose is to collect audit evidence that the management assertions made in the financial statements are reliable and in accordance with GAAP. Since my staff is good, they would have noticed the company’s sales projections are weak in control and are overstated by around 11%. They would perform a substantive test of detail in this area by selecting a sample of items from the account balances and finding bank statements, invoices, and test of details of balances. They would likely see specifically where the over-projections are being made. Lastly, in finalization, they would compile a report to management detailing any important matters, evaluating the audit evidence, and considering the type of audit opinion that should be reported. Specifically here, they would

This paper contains the summary of the details and results of the audit tests on

d. “The auditor's reliance on substantive tests to achieve an audit objective related to a particular assertion may be derived from tests of details, from analytical procedures, or from a combination of both. The decision about which procedure or procedures to use to achieve a particular audit objective is based on the auditor's judgment on the expected effectiveness and efficiency of the available procedures. For significant risks of material misstatement, it is unlikely that audit evidence obtained from substantive analytical procedures alone will be sufficient (PCAOB, AS 2305.09).”

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

3. What potential implications arise for the accounting firm if they issue an unqualified report without the going-concern explanatory paragraph?