What Are The Five Suggestion Procedures In Auditing

- The client may have had an issue with the predecessor auditor and this could be the reason for the switch. The client may not want the successor auditor knowing of the past audits for several reasons. An unqualified opinion may have been accessed by the successor that the client did not agree with. The client may not want this to happen so they switched auditors to try and gain a qualified opinion. Also, the client may want to start fresh with a new firm and receive a completely new opinion to ensure that their financial statements are still assuredly presented in a qualified manner.

5. The audit client should be allowed to "follow" its engagement audit partner to another accounting firm because it obviously breach the independence of the auditor after forging a relationship with the clients. SOX specified the "cooling-off" period for the auditor from entering the client management, this serves the same purpose as well.

Preliminary analysis to understand the client‘s business and risk - Understanding the auditee’s business, environment, and risks

Discuss the essential activities involved in the initial planning of an audit. How do these all specifically to the Smackey Dog Food client?

Auditing firms are no longer able to focus primarily on selling additional services. Instead, they are now concerned with providing excellent service to the client. This has resulted in additional tax and financial reporting

To begin the review process there should be some knowledge of the processes and procedures in the accounting department. It may be a good idea to observe all of the procedures that go into creating the financial statements. Look for any weaknesses or questionable practices and create a list of questions. Then in the next phase the auditor can conduct interviews to get a better understanding of the accounting staff. Observations and interviews can set the groundwork and provide information into any nuances or potential fraud or abuse. Any material weaknesses found can be further explored.

Under audit planning, the auditor decides whether to accept a new client or continue serving an existing one. This determination is

The architectural design of a firm varies greatly. In 1950, the business environment of Arthur Andersen included using the computer effectively for automated bookkeeping. Structure and regulation of the markets, helped Arthur Andersen to develop into a well-respected and reputable auditing company. The federal law in the 1930s requiring companies to turn over their financial statements yearly to an independent auditor not only strengthened Arthur Andersen, but also helped with their impeccable reputation. Arthur Andersen’s strategy included quality audits with a well-managed staff and profits. Promotions and rewards were plentiful when auditors made sound auditing decisions. In the 1990s, Arthur Andersen’s organizational architecture and strategy focused on generating new business, cost cutting, and performance evaluations along with decision rights over its business (Brickley, Smith, & Zimmerman, 2009).

The successor auditor is the auditor who is considering accepting or has already accepted engagement with the new firm. Communication between the predecessor and the successor is important. This information can bring about many issues such as “the predecessor auditor and the client may have disagreed about accounting principles, auditing procedures, or similarly significant matters” (PCAOBUS.org, 2013). The successor auditor should initiate the communication with the predecessor. The reason behind the successor auditor initiating the communication is to obtain valuable information that can lead to whether or not they should accept the engagement. The successor auditor may only request reasonable information to the predecessor auditor pertaining integrity of management, disagreements in accounting principles, auditing procedures, and or other significant matters. In addition, successor auditor can establish communication with audit committees or other with equivalent authority regarding “fraud, illegal acts by clients, and internal control related matters” (PCAOBUS.org, 2013). There are laws of confidentiality that the predecessor must abide by. The predecessor must maintain confidentiality at all times. Due to this confidentiality laws

The auditor’s responsibility is not to evaluate a client’s business model but to have a sufficient understanding of the entity. An auditor needs a sound and comprehensive understanding of the client’s business and industry to develop valid expectations about financial-statement assertions.

List FOUR audit procedures that an auditor will normally perform prior to attending the client’s premises on the day of the inventory count.

For the part of the test “Verify the BA, Developer, and QA attended a meeting to assign the user story points” Could you please see if we had requested screen shot of outlook to see who all attend the meeting or some other evidence? If so, please reference as source. If not please expand (Audit Procedures or on the workpaper testing) how you came to the determination.

The reason for the predecessor-successor auditor correspondence is to advise the successor auditor of the way of the business and particular ascribes of the customer to figure out whether the successor auditor needs to go up against them as a customer. It is the obligation of the successor auditor, with the consent of the client, to start correspondence with the predecessor auditor. The successor auditor needs to gather data on if there are any regions to give careful consideration to that are more inclined to misreports, the proficiency/adequacy of internal controls and if there is anything particular to run over with the administration or management of the company, how is the relationship with administration/ management of the company, if in case that they are consistent, and possibly most imperative, the main reason behind the switch.

An auditor would be interested in the above section, but just as important would be the Investing and Financing Activities sections. Auditors need to know where the company invested its money and where it received its money in order to figure out whether

The review is much less in scope than an audit, it mostly involves inquiries of client’s personnel and analytical procedures and is usually performed on a quarterly basis, whereas audits are done annually. However, the main difference is in the level of assurance that the reports are providing. While both required to perform inquiry and analytical procedures, the review produces limited assurance, that there are no material modifications that should be made to the financial statements and that the statements have been prepared in conformity with GAAP; an auditor, on the other hand, obtains a high, but not absolute, level of assurance whether the financial statements are free from