Sarbox Essay

999 Words Feb 14th, 2013 4 Pages
1a) What should the auditor consider when determining whether an account should be considered significant?
ANSWER:
The auditor should consider planning materiality. When a financial statement account exceeds the planning materiality, that account should be considered significant for both the audit of internal control over financial reporting and the financial statement audit. The more the account exceeds planning materiality, the greater it should be considered significant.
1b) What qualitative factors might cause an account that is otherwise relatively small quantitatively to be considered significant?
ANSWER:
AS #5 paragraph 29.
Qualitative factors include: * Size and composition of the account; * Susceptibility to
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Since the risk rating is not identified in the footnote, we assumed high risk due to the fact that the Mexico Finance Director recently resigned and his resignation is directly related to internal controls. The risk is high that there are material weaknesses of internal controls in other geographic regions. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

2b) At the consolidated F/S level, are there accounts on Sarbox Scooter’s F/S that are greater than planning materiality that should not be considered significant.
ANSWER:

* Property plant and equipment may present low inherent and fraud risk, if little change from year to year and it has been