ould mandatory rotation of audit firms improve the quality of the audit or would it simply result in a costly game of musical chairs as audit firms simply swopped clients?
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A: a.It is difficult to find an actual report because of following reasons: 1. Challange : Reporting…
Q: information should be communicated to management
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Q: CredPoint SAOG Company is unhappy with the audit report and threatens to change auditors next year.…
A: Credpoint is a big Client and losing such a client is a big matter & if an audit report is…
Q: Jamie is an auditor. While preparing to audit his client, FoodCourt, he finds a weakness in the…
A: Auditing is the process that is followed by a business to check the accuracy of the financial…
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A: A firm must establish and maintain a system of quality control . The firm 's system of quality…
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A: Internal control is the process or system which is designed by the management so as to provide the…
Q: An adverse opinion is most likely to be included in an audit report when Multiple Choice A…
A: There are 4 types of audit opinions. 1.unqualified 2.Qualified 3.Disclaimer 4.Adverse opinion
Q: What is a post-audit, why do firms use them, and what problems can arise when they are used?
A: Post Audit: It is a technique that is used for the evaluation of performance by comparing the actual…
Q: If the tests of controls indicate certain controls are not as effective as the auditor originally…
A: Test of controls are performed to determine the effectiveness of the control to detect and correct…
Q: You are the audit manager for a new audit client. Your staff auditors are unsure of what constitutes…
A:
Q: An auditor’s preliminary control risk assessment is at a high level. Which of the following are…
A: Solution Explanation - The preliminary assessment of control risk is the process of evaluating the…
Q: A CPA wishes to use representation letter as a substitute for performing other audit procedures.…
A: Following is the answer to the given question
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A: Accounting Information System: It is a structural framework used by business to collect, store,…
Q: Why would a staff auditor want to be “part of the client’s team” and consent to questionable…
A:
Q: Specialists with specialized skills in IT processing are seldom used on audits since each audit team…
A: In a field of auditing, the specific knowledge should be with regard to the auditing standards and…
Q: Which of the following is not an internal audit objective designed to add value to a purchasing…
A: Internal Audit: It is an activity of independent nature that consults activities that are designed…
Q: The objective of the auditor is to plan the audit so that it will be performed in an effective…
A: Audit is a sort of examination which is conducted to check the accuracy of the statements of an…
Q: Provide a detailed example as to what might cause an auditor/audit firm to decline taking on a new…
A: Audit engagement: Audit engagement is the act done by the auditor/audit firm to accept the audit of…
Q: When using test data, why are audit teams required to prepare only one transaction to test each IT…
A: Audit test data is used to test the existence and effectiveness of controls built into an…
Q: Auditing standards have been criticized by different sources forfailing to provide useful guidelines…
A: The widely agreed Auditing Standards (GAAS) are unique rather than general. Many practitioners and…
Q: ’t these types of controls automatically make a correction in the identified error? Why are…
A: Internal control: Internal control involves the norms and rules which are followed by the company to…
Q: If the potential client operates in a risky industry, the management lacks integrity, and have a…
A: Inherent risk In simple term inherent risk means that there is chance of omission or errors while…
Q: Statement on Auditing Standards No. 99 (AU 316) includes which of these recommendations? Group of…
A: SAS no. 99 defines a procedure in which the auditor acquires data to find risks of significant…
Q: Why do you think audit firms are willing to accept high-risk clients?
A: Auditing: Auditing refers to an independent examination of financial information of any…
Q: What factors do you think might cause an auditing team to spend more time than average on tests to…
A:
Q: The AICPA removed its general prohibition of CPAs taking commissions and contingentfees becausea.…
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Q: The auditor is required to maintain professional skepticism throughout the audit. Which of the…
A: Professional skepticism entails having an inquisitive mind. Keeping on the lookout for anything that…
Q: Marsha Mason, CPA, believes that it is appropriate to obtain an understanding of internal control…
A: Understanding of internal controls is a preliminary step in planning the audit as it will help the…
Q: In Crazy Eddie, the auditors’ work plan and results were viewed by the client, in part because the…
A:
Q: Which of the following best describes why auditors audit leased assets in conjunction with the audit…
A: The question is related to the audit of leased assets. Lease is an agreement between two parties…
Q: Larger firms should carefully consider their competence to take on an audit client in a specialized…
A: Competence is one of the important quality required for the auditor. He can conduct the audit only…
Q: uditors must not only decide whether to accept new clients; they also should periodically review…
A: Auditors has a right to take all working papers and ask relevant question from the personnel working…
Q: Address the questions in perspective of auditing 1. How can internal auditors use histograms…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: materiality
A: Ans. Materiality concept states that an accounting standard can be ignored if the net impact of…
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A: An audit planning refers to the strategy and the detailed approach related to the nature, timing,…
Q: - Quality control policies and procedures should be implemented at both the level of the audit firm…
A: Answer: - Quality control policies and procedures should be implemented at both the level of the…
Q: The competence (reliability) of audit evidence cannot be improved by testing a larger sample of…
A: Audit Evidence: Audit evidence are the supportive documents of the transaction on the basis of these…
Q: Regarding auditor remuneration, a self-interest threat to professional competence and due care is…
A: The auditor would require to provide the service with his full competence and due care. But if he…
Q: Auditors usually leave the legend of a tick mark to the discretion of the staff members. TRUE OR…
A: Solution: Tick mark: While carrying out the audit work auditor places the tick mark near to it to…
Q: Why does a certified audit present a high degree of risk for a CPA? A. They are difficult to…
A: Ans. Certified audit is auditing of financial statements to give an opinion on the true and fair…
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A: The auditor has to provide an opinion whether the books of accounts give a true and fair view of the…
Q: Choosing whether or not to accept a new client may be a difficult decision for auditors to make.
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Would mandatory rotation of audit firms improve the quality of the audit or would it simply result in a costly game of musical chairs as audit firms simply swopped clients?
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- The case study proposes that regular rotation and changes of the auditing firms could be an answer for the stubborn appalling auditing situations. It can also be argued that one of the reasons why this situation remains stubborn is the evergrowing business automation complexity in business. Processes are automated to such an extent that it is very difficult for auditors to cast a wide enough net to catch all possible misstatements. It is for this reason that the auditing field had to also evolve and hence the introduction of the Computer Assisted Auditing Techniques (CAAT). Summarise the different CAAT's techniques and why they can assist Auditing firms in this instance?In Crazy Eddie, the auditors’ work plan and results were viewed by the client, in part because the security of their workpapers was inadequate. Why is protecting the audit work product so important? In today’s audit environment, what should auditors do to protect their work product? What might auditors do in today’s audit environment that could expose their work product to individuals not engaged in the audit?Give one reason why performing advisory services could enhance audit quality. Give one reason why performing advisory services could weaken audit quality. Do you think performing advisory services for audit clients should be restricted? Why or why not?
- In the aftermath of the initial stage of examining a client's computer controls, an auditor might choose not to conduct compliance tests concerning the controls within the computer segment of the client's internal control. Which of the following reasons would be considered invalid for opting to exclude such tests? Select one: a. The controls duplicate operative controls existing elsewhere in the structure. b. The time and dollar costs of testing exceed the time and dollar savings in substantive testing if the tests of controls show the controls to be operative. c. There appear to be major weaknesses that would preclude reliance on the stated procedure. d. The controls appear adequate.Why would a staff auditor want to be “part of the client’s team” and consent to questionable practices rather than being an “independent watchdog” and contest such practices?Which of the following are problems when outsourcing the internal audit department? i) The outsourcer may be reluctant to report problems and lose the contract. ii)The outsourcer may not be aware of the culture in the organisation. iii)The cost of the outsourcer may well be high. iv)The company will have to have it’s own Internal Audit department as well. v)It may be that the distinction between external and internal audit is blurred when the internal audit function is outsourced. i), ii) iii) & v) only iii), iv) & v) only All of the above iii) and v) only
- CredPoint SAOG Company is unhappy with the audit report and threatens to change auditors next year. CredPoint SAOG is the biggest client of the auditor. The auditor’s independence may be compromised, as CredPoint SAOG is their biggest client and they do not want to lose such a client. Therefore, the auditor may issue a audit report that is favourable to CredPoint SAOG. Which threat may occur when a professional accountant may be deterred from acting objectively by threats, actual or perceived? a-Intimidation threats b-Self-interest threats c-Self-review threats d-Advocacy threatsAudit firms are expected to establish and maintain a system of quality control. PCAOB inspections often cite the lack of quality controls as a deficiency of audit firms. What role does leadership play in developing the kind of quality control system that supports ethical decision making in audits?Jamie is an auditor. While preparing to audit his client, FoodCourt, he finds a weakness in the company's internal control that might suggest that the company has a higher than normal risk, and revenue may have been recorded in the wrong period. Given this weakness, what information should be communicated to management?
- Which of the following is not an internal audit objective designed to add value to a purchasing department?a. A review of the bidding process indicates that a vendor company may be operating undertwo different names; therefore, purchasing is not getting the three independent bidsrequired by policy.b. The purchasing process is causing unnecessary delays in ordering product.c. The purchasing department is not following a new human resource policy requiring a sixmonth performance review for new employees.d. The director of purchasing is new to the organization and has made several decisionsregarding vendor approvals with which the auditor does not agree.Regarding auditor remuneration, a self-interest threat to professional competence and due care is created if: A professional accountant with an audit firm tries to get new work through advertising or other forms of marketing The fee quoted is so low that it may be difficult to perform the audit The auditor accepts a referral of a new client from an existing client. A gift from a client is acceptedProvide a detailed example as to what might cause an auditor/audit firm to decline taking on a new client/audit engagement.
