Comment upon each of the following statements you heard in a conversation between two newly hired staff auditors. a. “Of course, I’m qualified to be assigned to this engagement. I have an accounting degree from a top university and was an honors graduate. I know some of the accounting rules have changed since I graduated, but I’ll be able to figure that out as we go through the audit.” b. “It doesn’t really matter what others think. . . . I’m completely independent of Acme Industries and should be a member of the audit team. While I own some stock, it’s a small amount and I’m holding it for the long term, anyway.” c. “You really have to question everything the client tells you. That’s what professional skepticism is all about. It’s a shame you can’t believe a word they say.” d. “The evidence is lower in quality, but we typically use internal evidence when we audit property, plant, and equipment. It just takes too much time and costs too much to get more reliable evidence.” e. “On that last job, we really planned the audit well. We were able to finish everything by November 1 and didn’t need to do any work after year-end.” f. “We’re not too worried about internal control. We always do the same substantive procedures anyway, so why take the time to look at the client’s controls?” g. “Because the client isn’t accounting for its leases properly, we need to issue either a qualified opinion or a disclaimer of opinion. Just how large a dollar impact does this have on the financial statements?” h. “When we evaluate items for materiality, the only thing we need to worry about is the absolute dollar amount. There really isn’t anything else we need to consider.”
Comment upon each of the following statements you heard in a conversation between two newly hired staff auditors.
a. “Of course, I’m qualified to be assigned to this engagement. I have an accounting degree from a top university and was an honors graduate. I know some of the accounting rules have changed since I graduated, but I’ll be able to figure that out as we go through the audit.”
b. “It doesn’t really matter what others think. . . . I’m completely independent of Acme Industries and should be a member of the audit team. While I own some stock, it’s a small amount and I’m holding it for the long term, anyway.”
c. “You really have to question everything the client tells you. That’s what professional skepticism is all about. It’s a shame you can’t believe a word they say.”
d. “The evidence is lower in quality, but we typically use internal evidence when we audit property, plant, and equipment. It just takes too much time and costs too much to get more reliable evidence.”
e. “On that last job, we really planned the audit well. We were able to finish everything by November 1 and didn’t need to do any work after year-end.”
f. “We’re not too worried about internal control. We always do the same substantive procedures anyway, so why take the time to look at the client’s controls?”
g. “Because the client isn’t accounting for its leases properly, we need to issue either a qualified opinion or a disclaimer of opinion. Just how large a dollar impact does this have on the financial statements?”
h. “When we evaluate items for materiality, the only thing we need to worry about is the absolute dollar amount. There really isn’t anything else we need to consider.”
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
