Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 2, Problem 11RQ
To determine
Indicate the element of quality control which affect this procedure and explain the purpose of the given requirement.
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The following is an example of a CPA firm’s quality controlprocedure requirement: “Any person being considered for employment by the firm musthave completed a basic auditing course and have been interviewed and approved by anaudit partner of the firm before he or she can be hired for the audit staff.” Which elementof quality control does this procedure affect and what is the purpose of the requirement?
Any person any person being considered for employment by the firm must have completed a basic auditing course and have been interviewed and approved by an audit partner of the audit staff " which element of the quality control does this procedure affect and what is the purpose of the requirements?
For each of the following procedures taken from the quality control manual of a CPA firm, identify the applicable element of quality control from;
A. All potential new clients are reviewed before acceptance. The review includes consultation with predecessor auditors and background checks. All new clients are approved by the firm management committee, including assessing whether the firm has the technical competence to complete the engagement.
B. The partners accept responsibility for leading and promoting a quality assurance culture within the firm and for providing and maintaining a quality assurance manual and all other necessary practical aids and guidance to support engagement quality.
C. Each office of the firm shall be visited at least annually by review persons selected by the director of accounting and auditing. Procedures to be undertaken by the reviewers are illustrated by the office review program.
D. Appropriate accounting and auditing research requires adequate technical…
Chapter 2 Solutions
Auditing And Assurance Services
Ch. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 9RQCh. 2 - Prob. 10RQ
Ch. 2 - Prob. 11RQCh. 2 - State what is meant by the term peer review. What...Ch. 2 - Prob. 13.1MCQCh. 2 - Prob. 13.2MCQCh. 2 - Prob. 13.3MCQCh. 2 - Prob. 14.1MCQCh. 2 - Prob. 14.2MCQCh. 2 - Prob. 14.3MCQCh. 2 - Prob. 15.1MCQCh. 2 - Prob. 15.2MCQCh. 2 - Prob. 15.3MCQCh. 2 - Prob. 16DQPCh. 2 - Prob. 17DQP
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Similar questions
- There are several internal controls in the personnel and employment function that are important from an audit perspective. For example, there should be an adequate investigation of the competence and trustworthiness of new employees. Discuss other internal controls in the personnel and employment function that are important from an audit perspective.arrow_forwardIn making a decision whether to accept or reject an engagement, an auditor should consider competence, independence, integrity of the prospective client's management and its ability to serve the client properly. Furthermore, the auditor is expected to perform the following (choose all the items that apply to the previous statement): * Obtain a preliminary knowledge of the client's business and industry to determine whether the client management has the degree of competence required by the engagement. Consider whether there are any threats to the firm's independence and objectivity, and if so, whether adequate safeguards can be established. Evaluate auditability. Investigation of the integrity of the client's management through inquiry to appropriate parties or communication with the successor auditor. Agree on the terms of the engagement and prepare a management representation letter. Evaluation of the firm's ability to serve the prospective client.arrow_forwardIn making a decision whether to accept or reject an engagement, an auditor should consider competence, independence, integrity of the prospective client's management and its ability to serve the client properly. Furthermore, the auditor is expected to perform the following (choose all the items that apply to the previous statement): * a. Obtain a preliminary knowledge of the client's business and industry to determine whether the client management has the degree of competence required by the engagement. b. Consider whether there are any threats to the firm's independence and objectivity, and if so, whether adequate safeguards can be established. c. Evaluate auditability. d. Investigation of the integrity of the client's management through inquiry to appropriate parties or communication with the successor auditor. e. Agree on the terms of the engagement and prepare a management representation letter. f. Evaluation of the firm's ability to serve the prospective client.arrow_forward
- Registered external auditors must have the knowledge and skills to perform their function and should be honest. There are also a number of other attributes or fundamental principles of ethical behavior, which all auditors should have and these are identified in professional external auditing standards issued by IRBA as follows:· integrity· objectivity· professional competence and due care· confidentiality· professional behaviorThe following actions taken by registered external auditors are example of non-compliance with one or more principles listed above; Question 1 Mark Proctor, a registered auditor arranged with some of his clients to pay the fees that he charged for auditservices, in cash. For clients who agreed to do so, no VAT was charged and a discount was given.arrow_forwardA CPA firm’s quality control procedures pertaining to the acceptance of a prospective audit client would most likely include (A) Inquiry of management as to whether disagreements between the predecessor auditor and prospective client were resolved satisfactorily. (B) Consideration of whether sufficient competent evidential matter may be obtained to afford a reasonable basis for an opinion. (C) Inquiry of third parties, such as the prospective client’s bankers and attorneys, about information regarding the prospective client and its management. (D) Consideration of whether the internal control structure is sufficiently effective to permit a reduction in the required substantive tests. Choose the letter of your choice and explain your answerarrow_forwardRegistered external auditors must have the knowledge and skills to perform their function and should be honest. There are also a number of other attributes or fundamental principles of ethical behavior, which all auditors should have and these are identified in professional external auditing standards issued by IRBA as follows:· integrity· objectivity· professional competence and due care· confidentiality· professional behaviorThe following actions taken by registered external auditors are example of non-compliance with one or more principles listed above; Question 3 Clark Parker the registered auditor in charge of the audit of Datatec Ltd, made racist comments concerningthe client’s staff during the audit planning session.arrow_forward
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