Select the necessary words from the list of possibilities to complete the following statements. Statements 1. Tests of controls and are referred to as further audit procedures. The examination of large data sets to uncover hidden patterns, unknown correlations and other useful 2. information is referred to as A letter signed by officers of the client company at the auditors' request which sets forth certain assertions 3. about the company's financial position and operations is known as a 4. The is a schedule listing the balances of accounts in the client's general ledger. The auditors develop 5. client's accounting records. to recommend to management to correct the effects of errors or fraud in the Without regard to the effect of controls, 6. have a reasonable possibility of containing a misstatement that could cause the financial statements to be materially misstated. 7. The term relates to the quantity of evidence that the auditors should obtain. is a type of documentary evidence transmitted directly to the auditors by a third party (e.g., a 8. customer or a vender).

Select the necessary words from the list of possibilities to complete the following statements. Statements 1. Tests of controls and are referred to as further audit procedures. The examination of large data sets to uncover hidden patterns, unknown correlations and other useful 2. information is referred to as A letter signed by officers of the client company at the auditors' request which sets forth certain assertions 3. about the company's financial position and operations is known as a 4. The is a schedule listing the balances of accounts in the client's general ledger. The auditors develop 5. client's accounting records. to recommend to management to correct the effects of errors or fraud in the Without regard to the effect of controls, 6. have a reasonable possibility of containing a misstatement that could cause the financial statements to be materially misstated. 7. The term relates to the quantity of evidence that the auditors should obtain. is a type of documentary evidence transmitted directly to the auditors by a third party (e.g., a 8. customer or a vender).

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process

Section: Chapter Questions

Problem 40MCQ

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Similar questions

The external auditor of a company has certain requirements due to Sarbanes-Oxley. Which of the following best describes these requirements? A. The auditor is required to only report weaknesses in the internal control design of the company he or she is auditing. B. The auditor must issue an internal control report on the evaluation of internal controls overseen by the Public Company Accounting Oversight Board C. The auditor in charge can serve for a period of only two years. D. The Public Company Accounting Oversight Board reviews reports submitted by the auditors when no evaluations have been performed.
Refer to Exhibit 2.5 and answer the following questions. a. (Sections 101, 104, and 105) How does the establishment and operation of the PCAOB help to ensure quality external audits? How will audit firm inspections and investigations by the PCAOB help ensure high audit quality? b. (Sections 201-203) How do Sections 201-203 address audit ()r independence concerns? c. (Section 206) What is a cooling-off period, and how does it address auditor independence concerns? d. (Section 301) How do the audit committee requirements help ensure effective corporate governance? e. (Sections 302 and 906) How do the officer certification requirements help to address the risk of fraud in publicly traded organizations? What is the likelihood that a CFO who is committing fraudulent financial reporting would sign the certification falsely, and what are your reactions to that possibility? f. (Section 401) How does this section relate to the Enron fraud? g. (Section 404) How do the management assessment and audit or attestation of internal controls contained in this section help to address the risk of fraud in publicly traded organizations? h. (Section 407) Why is it important that at least one member of the audit committee be a financial expert? What are the financial reporting implications if the audit committee does not have any individuals serving on it who possess financial expertise? i. (Section 802) How does this section relate to the Enron fraud?
Assume that management is gathering evidence as part of its process for assessing the effectiveness of internal control over financial reporting. The company is a manufacturer of high-dollar specialized Control Tested machines used in the medical profession. The following table identifies important controls that management is testing regarding accounts related to revenue recognition, accounts receivable, and other sales related activities. The first column describes the control, and the second column describes the test results. Based on the test results, determine the conclusion that management should likely make about the deficiency. (Is it a control deficiency, a significant deficiency, or a material weakness?)
Professional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.