ACCT GOV.+NFP ENTITIES LOOSELEAF W/CONN.
18th Edition
ISBN: 9781260949766
Author: RECK
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 11, Problem 19.9EP
Dan Cole is the head of the county’s Division of Animal Control. The division receives funding from both the state and federal governments and is required to have its audit under GAGAS. You and Dan were fraternity brothers at All State University, and your families often celebrate holidays and special occasions together. Dan has asked your audit firm to perform the division’s financial audit this year. What should you do?
- a. Contact the state board of accountancy for authorization to accept the audit.
- b. Decline the audit because you want to avoid any perceived independence issues.
- c. Accept the audit but disclose your relationship in the engagement letter and audit report.
- d. Refer to the ethics and independence guidance in GAGAS before making a decision to accept the engagement.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The board of trustees of a local church is concerned abount the internal accounting controls pertaining to the offering collections made at weekly services. They ask you to serve on a three person audit team with the internal auditor of a local university and a CPA who has just joined the church. At a meeting of the audit team and the board of trustees, you learned the following:
The church’s board of trustees has delegated reasponsibility for the financial management and audit of the financial records to the finance committee. This group prepares the annual budget and approves major disbursements but is not involved in collections or recordkeeping. No audit has been made in recent years because the same trusted employee has kept church records and serves as financial secretary for 15 years. The church does not carry any fidelity insurance.
The collection at the weekly service is taken by a team of ushers who volunteer to serve for 1 month. The ushers take the collection plates…
Tammy Potter, a new partner with the regional CPA firm of Tower & Tower, was recently appointed to the board of directors of a local civic organization. The chairman of the board of the civic organization is Lewis Edmond, who is also the owner of a real estate development firm, Tierra Corporation.
Potter was quite excited when Edmond indicated that his corporation needed an audit and he wished to discuss the matter with her. During the discussion, Potter was told that Tierra Corporation needed the audit to obtain a substantial amount of additional financing to acquire another company. Presently, Tierra Corporation is successful, profitable, and committed to growth. The audit fee for the engagement should be substantial.
Because Tierra Corporation appeared to be a good client prospect, Potter tentatively indicated that Tower & Tower wanted to do the work. Potter then mentioned that Tower & Tower’s quality control policies require an investigation of new clients and approval…
Harold Jones, the financial aid officer at a small university, manages all aspects of the financial aid program. Jones receives requests for aid from students, determines whether the students meet the aid criteria, authorizes aid payments, notifies the applicants that their request has been either approved or denied, writes the financial aid checks on the account he controls, and requires that the students come to his office to receive the checks in person. For years, Jones has used his position of authority to perpetrate the following fraud.Jones encourages students who clearly will not qualify to apply for financial aid. Although the students do not expect aid, they apply on the off chance that it will be awarded. Jones modifies the financial information in the students’ applications so that it falls within the established guidelines for aid. He then approves aid and writes aid checks payable to the students. The students, however, are informed that aid was denied. Because the…
Chapter 11 Solutions
ACCT GOV.+NFP ENTITIES LOOSELEAF W/CONN.
Ch. 11 - Prob. 1QCh. 11 - Prob. 2QCh. 11 - Prob. 3QCh. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - Prob. 6QCh. 11 - Prob. 7QCh. 11 - Prob. 8QCh. 11 - Prob. 9QCh. 11 - Prob. 10Q
Ch. 11 - Background. Lake View Mental Health Affiliates, a...Ch. 11 - Prob. 12CCh. 11 - Prob. 14CCh. 11 - Custer County receives pass through funds from the...Ch. 11 - Prob. 16CCh. 11 - The city council members of Laurel City are...Ch. 11 - Prob. 19.1EPCh. 11 - Prob. 19.2EPCh. 11 - Prob. 19.3EPCh. 11 - Prob. 19.4EPCh. 11 - Prob. 19.5EPCh. 11 - Prob. 19.6EPCh. 11 - Prob. 19.7EPCh. 11 - Prob. 19.8EPCh. 11 - Dan Cole is the head of the countys Division of...Ch. 11 - Prob. 19.10EPCh. 11 - Prob. 19.11EPCh. 11 - Prob. 19.12EPCh. 11 - Prob. 19.13EPCh. 11 - Prob. 21EPCh. 11 - Prob. 22EPCh. 11 - Prob. 23EPCh. 11 - Prob. 24EPCh. 11 - Prob. 25EP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The board of trustees of a local church is concerned about the internal accounting controls for the offering collections made at weekly services. The trustees ask you to serve on a three-person audit team with the internal auditor of a local college and a CPA who has just joined the church. At a meeting of the audit team and the board of trustees you learn the following. The church’s board of trustees has delegated responsibility for the financial management and audit of the financial records to the finance committee. This group prepares the annual budget and approves major disbursements. It is not involved in collections or recordkeeping. No audit has been made in recent years because the same trusted employee has kept church records and served as financial secretary for 15 years. The church does not carry any fidelity insurance. The collection at the weekly service is taken by a team of ushers who volunteer to serve one month. The ushers take the collection plates to a basement…arrow_forwardTammy Potter, a new partner with the regional CPA firm of Tower & Tower, was recently appointed to the board of directors of a local civic organization. The chairman of the board of the civic organization is Lewis Edmond, who is also the owner of a real estate development firm, Tierra Corporation. Potter was quite excited when Edmond indicated that his corporation needed an audit and he wished to discuss the matter with her. During the discussion, Potter was told that Tierra Corporation needed the audit to obtain a substantial amount of additional financing to acquire another company. Presently, Tierra Corporation is successful, profitable, and committed to growth. The audit fee for the engagement should be substantial. Because Tierra Corporation appeared to be a good client prospect, Potter tentatively indicated that Tower & Tower wanted to do the work. Potter then mentioned that Tower & Tower’s quality control policies require an investigation of new clients and approval…arrow_forwardMagi Chen is the managing director of Sun Construction Pty Ltd, a family owned business that provides construction services. As Magi is interested in purchasing some new construction equipment’s for her business, she has approached her local bank for finance. The bank has asked that Magi provide an audited financial statement to assist them in considering her loan application. Magi has approached your audit firm for this service and you have been allocated the task of auditing Sun Construction for the year ended 30 June 2019. You have undertaken a preliminary review of the business and determined that a substantive testing approach would be suitable and appropriate. You are currently preparing an audit program for the revenue cycle. The following information has been obtained from your review:• Magi usually works 120 hours a fortnight. Part of this time is spent travelling between different clients and is not charged to the clients. The remaining time is charged at $60 per hour,…arrow_forward
- Taylor, a CPA, has been engaged to audit the financial statements of University Books, Incorporated. University Books maintains a large cash fund exclusively for the purpose of buying used books from students for cash. The cash fund is active all year because the nearby university offers a large variety of courses with varying starting and completion dates throughout the year. Receipts are prepared for each purchase. Reimbursement vouchers periodically are submitted to replenish the fund. Required:Construct an internal control questionnaire to be used in evaluating the internal control over University Books’ repurchasing process using the revolving cash fund. The internal control questionnaire should elicit a yes or no response to each question. Do not discuss the internal controls over books that are purchased from publishers.arrow_forwardThe accounting firm involved in this case wants to know if their independence will be questioned by the BOA. You have been asked to submit an analysis and conclusion. 2. Franklin Rosario is an audit manager in the Salvador & Santos accounting firm. He has just been assigned to the audit of the Starex Money Market Fund. Franklin has maintained a money market account with SMMF since it opened in 2008. All his savings, amounting to 75 percent of his total assets, are in this account, which pays the highest interest available in money market funds. However, his account constitutes only .00001 percent of the fund's assets.arrow_forwardRead the following cases. Required: For each case, select whether the action or situation shows a violation of the AICPA Code of Professional Conduct, and select the relevant rule. a. CPA Jerry Cheese became the new auditor for Python Insurance Company. Cheese knew a great deal about insurance accounting but had never conducted an audit of an insurance company. Consequently, Cheese hired CPA Tate Gilliam, who had six years of experience with the State Department of Insurance Audit. Gilliam managed the audit, and Cheese was the partner in charge. b. CPA Mackenzie Palin practices public accounting and is a director of Comedy Company. Palin's firm performs consulting and tax services for Comedy. Palin prepared unaudited financial statements on Comedy's letterhead and submitted them to First National Bank in support of a loan application. Palin's accounting firm received a fee for this service. c. CPA Ellery Idle audited the financial statements of Monty Corporation and gave an unmodified…arrow_forward
- The Office of the Auditor General is mandated to conduct audits of all public institutions in Jamaica. It has been observed that the same observations and recommendations are made each year in the Auditor General’s Reports concerning increased misuse and misapplication of public funds. Following the establishment of new parish councils in some parishes around the country four years ago, there is concern that the trend of misuse and misapplication of public funds may be experienced in these newly established councils just like is the case with the existing councils. The Ministry responsible for local government has decided that consultants should be engaged to hold workshops with the controlling officers of the newly established councils on the importance of transparency and accountability in the use of public funds and the importance of internal controls systems. You work for a consultancy firm that has been engaged to run these workshops and all the new districts around the country.…arrow_forwardThe Office of the Auditor General is mandated to carry out audits of all public institutions in Jamaica. It has been observed that the same observations and recommendations are made each year in the Auditor General’s Reports concerning increased misuse and misapplication of public funds. Following the establishment of new parish councils in some parishes around the country four years ago, there is concern that the trend of misuse and misapplication of public funds may be experienced in these newly established councils just like is the case with the existing councils. The Ministry responsible for local government has decided that consultants should be engaged to hold workshops with the controlling officers of the newly established councils on the importance of transparency and accountability in the use of public funds and the importance of internal controls systems. You work for a consultancy firm that has been engaged to run these workshops and all the new districts around the…arrow_forwardThe Office of the Auditor General is mandated to carry out audits of all public institutions in Jamaica. It has been observed that the same observations and recommendations are made each year in the Auditor General’s Reports concerning increased misuse and misapplication of public funds. Following the establishment of new parish councils in some parishes around the country four years ago, there is concern that the trend of misuse and misapplication of public funds may be experienced in these newly established councils just like is the case with the existing councils. The Ministry responsible for local government has decided that consultants should be engaged to hold workshops with the controlling officers of the newly established councils on the importance of transparency and accountability in the use of public funds and the importance of internal controls systems. You work for a consultancy firm that has been engaged to run these workshops and all the new districts around the…arrow_forward
- The Office of the Auditor General is mandated to carry out audits of all public institutions in Jamaica. It has been observed that the same observations and recommendations are made each year in the Auditor General’s Reports concerning increased misuse and misapplication of public funds. Following the establishment of new parish councils in some parishes around the country four years ago, there is concern that the trend of misuse and misapplication of public funds may be experienced in these newly established councils just like is the case with the existing councils. The Ministry responsible for local government has decided that consultants should be engaged to hold workshops with the controlling officers of the newly established councils on the importance of transparency and accountability in the use of public funds and the importance of internal controls systems. You work for a consultancy firm that has been engaged to run these workshops and all the new districts around the country.…arrow_forwardThe firm of McGraw and West, CPAS, has two offices, one in Phoenix and one in San Diego. The firm has audited the Cameron Corporation out of its Phoenix office for the past five years. For each of the following independent cases, which occurred during the year under audit, indicate whether Independence would be impaired. a. Mary McGraw, a partner in the San Diego office, fell wildly in love with Bill Smith, the treasurer for Cameron Corporation. They were married in Las Vegas. During the week, McGraw still lives in San Diego and works in that office, while Bill Smith lives in Phoenix, working for Cameron. On weekends they commute to their home In Yuma. Mary does not participate in the engagement. b. Jim West is the father of Will West, a Phoenix partner. Jim West has a material Investment in Cameron. Will West is unaware of his father's Investment but does participate in the engagement. c. Bill Johnson, a senior in the San Diego office, has a material Investment in the capital stock of…arrow_forwardAn independent CPA is engaged to audit the financial statements of Holland City . The city has a variety of revenue sources including a $350,000 grant from the U.S. Department of Housing and Urban Development. Which of the following audit standards must the CPA use when conducting the audit? The AICPA audit standards. The GAO audit standards. The OMB audit standards. All of the standards listed in the choices.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Cost-Volume-Profit (CVP) Analysis and Break-Even Analysis Step-by-Step, by Mike Werner; Author: Accounting Step by Step;https://www.youtube.com/watch?v=D0MOfse9OWk;License: Standard Youtube License