From there on, whenever she does any audit work, she will make sure
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Nazril is a new audit trainee at Faezi & Co. In assisting the audit seniors to undertake the audit work, the audit seniors always advise her to properly maintain all the working papers. From there on, whenever she does any audit work, she will make sure all information is properly documented and properly kept in a proper file.
The ownership of audit documentation (current audit files, permanent audit files etc) will always belong to the auditor. Discuss two (2) situations where the client would have the right to examine the files.
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- Erica Gray, CPA, is a sole practitioner. She has been practicing as an auditor for 10 years. Recently a long-standing audit client asked Gray to design and implement an integrated computer-based accounting information system. The fees associated with this additional engagement with the client are very attractive. However, Gray wonders if she can remain objective on subsequent audits in her evaluation of the client’s accounting system and its records if she was responsible for its design and implementation. Gray knows that professional auditing standards require her to remain independent in fact and appearance from her auditing clients. Required 1. What do you believe auditing standards are mainly concerned with when they require independence in fact? In appearance? 2. Why is it important that auditors remain independent of their clients? 3. Do you think Gray can accept this engagement and remain independent? Justify your response.Erica Gray, CPA, is a sole practitioner. She has been practicing as an auditor for 10 years. Recently a long-standing audit client asked Gray to design and implement an integrated computer-based accounting information system. The fees associated with this additional engagement with the client are very attractive. However, Gray wonders if she can remain objective on subsequent audits in her evaluation of the client’s accounting system and its records if she was responsible for its design and implementation. Gray knows that professional auditing standards require her to remain independent in fact and appearance from her auditing clients. Submit a substantive posting of at least 250 words that answers the questions Question 1: What do you believe auditing standards are mainly concerned with when they require independence in fact? In appearance? Question 2: Why is it important that auditors remain independent of their clients? Question 3: Do you think Gray can accept this engagement and…A staff auditor had just begun work and was assigned to a client that her supervisor, a senior auditor, had worked for many years. Her supervisor assigned her to this client and sent an email welcoming her to the client and providing details and files regarding the client. Among the information included in the email was the client's general ledger, her expected work hours during the busy season, and her assigned audit sections. The supervisors of the new staff auditor requested a meeting to get her acquainted with the position and answer any questions she may have. What questions should the staff auditor ask her supervisor, a senior auditor who has worked for her assigned client for many years?
- You are the training manager at Guava & Co., Chartered Accountants. Some trainees in the firm have requested you to clarify the following issues: a) Can the auditor discard any audit document, forming part of his opinion, after the issuance of the auditor’s report? b) The changes that can be incorporated during the final the assembly process citing three such examples. c) The circumstances under which it becomes necessary to modify the existing audit documents or add new audit documents after the issuance of the auditor’s report and the matters that should be documented in such a situation. Required: Offer appropriate explanations for each of the above issues.Tracy Smith, CPA, is in charge of the audit of Olympic Fashions, Inc. Seven young members of the public accounting firm's professional staff are working with Smith on this engagement, and several of the young auditors are avid skiers. Olympic Fashions owns two condominiums in Aspen, Colorado, that it uses primarily to entertain clients. The controller of Olympic Fashions has told Smith that she and any of her audit staff are welcome to use the condominiums at no charge any time that they are not already in use. How should Smith respond to this offer? Explain.John Josephs an audit manager for Tip, Acanoe & Tylerto, was asked to speak at a dinner meeting of the local Small Business Administration Association. The president of the association has suggested that he talk about the various phases of the audit process. John has asked you, his trusted assistant, to prepare an outline for his speech. He suggests that you answer the following. Required: A) List and describe the various phases of an audit. B) Describe how audit procedures designed for one purpose might provide evidence for other purposes. Give an example. C) One of the phases involves understanding an entity's internal control. Why might the members of the association be particulary interested in the work conducted by auditors in this phase of the audit?
- You are an audit supervisor in Misso & Co, an audit firm. Your audit team has been assigned to perform the audit on sales and other income for a client, Dimmy Sdn. Bhd. (Dimmy). You are given four audit trainees to assist you in completing the audit on cash and bank. In addition, you are also required to audit on the receivables account of Dimmy.(a) Explain ANY FIVE (5) types of procedures that an auditor can perform to obtain audit evidence and provide an example for each type of procedure.You are an audit graduate working for an audit firm. A client has said to you that you seem to be endlessly documenting matters and queries is this necessary as it is undoubtedly increasing the cost of the audit.Permanent files serve as handy reference source for new staff members in acquainting themselves with the client and for more experienced auditor in planning the current year’s audit. TRUE OR FALSE? WHY?
- You are an induction and training officer for Maher Public Accountants, a leading accounting firm based in Dublin, Ireland. You are due to give a training course to a group of newly recruited audit trainees in fraud and error. This is a particularly important course and audit trainees from previous cohorts have acknowledged the benefit of the course in their feedback. The current cohort of audit trainees are particularly interested in understanding their responsibilities and those of the directors in the area of fraud and error. Required:Prepare material for the audit trainees as part of the induction pack which covers the following:(a) Identify and distinguish the responsibilities of the auditor and the directors with regards to fraud. (b) Discuss the steps undertaken by auditors when they detect and suspect fraud. (c) Critically examine the limitations of audit procedures in detecting fraud and error.You are an audit senior of Beckham & Co and have been allocated to the audit of Willian Co (Willian), a listed company which has been an audit client for eight years and specializes in manufacturing musical instruments.Spice Posh was the audit engagement partner for Willian and as she had completed seven years as the audit engagement partner, she has recently been rotated off the audit engagement. The current audit partner, ShakiraPique, has suggested that in order to maintain a close relationship with Willian, Spice should undertake the role of independent review partner this year. In addition, Willian has requested that Spice assist them by attendingtheir audit committee meetings, as a non-executive director has recently left the company. Willian has also asked Shakira and the other partners at Beckham & Co to help them in recruiting a new non-executive director.The total fees received by Beckham & Co for last year equated to 16% of the firm’s total fee income. The…You are an audit graduate working for an audit firm. A client has said to you that you seem to be endlessly documenting matters and queries is this necessary as it is undoubtedly increasing the cost of the audit. REQUIRED Succinctly explain what your answer to the client should be.