You have been asked to prepare a presentation to new recruits in your audit firm on the use of working papers. You have also been asked to include in your presentation a distinction between files held in permanent and current files, the design and use of audit programmes and the purpose of an audit trail with respect to the conduct of the audit.Requireda) State four matters you would expect to find recorded in working papers in the permanent audit file and explain their purpose.b) Explain the design and use of audit programmes.c) Explain the importance of recording details of the actual evidence examined in the course of the audit on which the conclusions are drawn.d) Post your response to the discussion forum and engage two of your peers in a critically constructive dialogue about their responses.

An audit programme seems to be a checklist of the audit processes that an auditor should undertake…

Answered: You have been asked to prepare a…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

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

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

Chapter6: Audit Evidence

Section: Chapter Questions

Problem 19CYBK

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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?
During an audit engagement, pertinent data are compiled and included in the auditfiles. The audit files primarily are considered to be(1) a client-owned record of conclusions reached by the auditors who performedthe engagement.(2) evidence supporting financial statements.(3) support for the auditor’s representations as to compliance with auditing standards.(4) a record to be used as a basis for the following year’s engagement
The preparation of audit documentation is an integral part of an auditor’s examination of financial statements. On a recurring engagement, auditors review the audit plans and audit documentation from the prior audit while planning the current audit to determine their usefulness for the current-year work.Required:a. (1) What are the purposes or functions of audit documentation? (2) What records may be included in audit documentation?b. What factors affect the auditors’ judgment of the type and content of the audit documentation for a particular engagement?c. What should be included in audit documentation to support auditors’ compliance with generally accepted auditing standards?d. How can auditors make the most effective use of the prior-year audit plans in a recurring audit?

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