AUDITING+ASSURANCE 12MONTH ACCESS CARD
17th Edition
ISBN: 9780135635131
Author: ARENS
Publisher: WILEY
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 17DQP
To determine
Identify the applicable element of quality control for the given situation.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
If you were Sarah, how would you respond to each question? 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…
By reference to QC Section 10, A Firm’s System of Quality Control, paragraphs 18 and A2.
List the 6 Elements of a System of Quality Control.
Indicate whether as an entry level staff accountant you have any personal responsibility for quality and whether or not you are expected to comply with these policies and procedures.
Compile a full set of notes which you will use to prepare for the training session that you are
required to present. The notes should include:
a) The steps a professional accountant should take in applying the conceptual framework
approach.
b) An explanation of the five categories of threats suggested by the code.
c) A brief description of six general safeguards in an audit firm’s work environment that
will ensure that threats to compliance with the fundamental principles are addressed
appropriately
Chapter 2 Solutions
AUDITING+ASSURANCE 12MONTH ACCESS CARD
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
Knowledge Booster
Similar questions
- Explain why ethical auditing is the regular comprehensive evaluation of the compliance of the firm’s ethical policies and procedures. This should be a 1-2 pages paper written in standard APA format.arrow_forwardAudit Procedures for Quality Control in Auditing Firms: Quality control in auditing firms is essential to ensure that audit engagements are performed with the highest level of professionalism, integrity, and accuracy. Audit procedures for quality control encompass various measures implemented by auditing firms to maintain and enhance the quality of their audit services. Here are some key aspects of audit procedures for quality control: 1. Quality Control Policies and Procedures: Auditing firms establish comprehensive quality control policies and procedures that outline the firm's commitment to maintaining audit quality. These policies cover areas such as independence, ethical standards, professional competence, supervision, and review of audit work. 2. Risk Assessment: Auditing firms conduct risk assessments to identify potential risks and threats to audit quality. This involves evaluating factors such as client characteristics, industry risks, inherent risk factors, and complexity of…arrow_forwardThe 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?arrow_forward
- Each of the following quality control policies and procedures is typical of ones that can be found in public accounting firms’ systems of quality control. Identify each of them with one of the six elements of quality control identified by SQCS 8.a. Assign management responsibilities in such a manner that commercial considerations do not override the quality of work performed.b. Establish policies and procedures for resolving differences of opinion among firm personnel that arise during professional engagements.c. Develop policies and procedures to ensure that professionals are provided appropriate professional development opportunities.d. Review engagement documentation, reports, and the client’s financial statements.e. Develop effective performance evaluation, compensation, and advancement procedures.f. Identify circumstances and relationships that create threats to independence and take appropriate action to eliminate those threats or reduce them to an acceptable level.g. Identify…arrow_forwardWhich of the following BEST (select one) explains why IT governance provides a starting point for the IT auditor? a) IT governance provides a means to communicate relevant policies to management and staff. b) IT governance is the responsibility of the board of directors and executive management. c) IT governance includes the tone at the top which influences the culture and overall acceptance of the IT audit process. d) IT governance focuses accountability at both management and staff during the employee evaluation process.arrow_forwardIdentify how each of the following statements relates to the performance principle by considering which element(s) of the principle are related to that statement. (A statement may be related to more than one element.) Use the following elements in providing your response: Reasonable assurance • Planning and supervision • Materiality ⚫ Risk assessment • Audit evidence a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. b. Obtaining an understanding of the client's business and industry. c. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. d. Obtaining confirmations from the client's customers as to the ending balances in accounts receivable. e. Preparing a written audit plan. f. Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. g. Considering the likelihood that the account balance contains a material…arrow_forward
- The standards are divided into attribute, performance and implementation guidance. Classify the following standards according to attribute and performance standards:A) Chief Audit Executive Roles Beyond Internal Auditing.B) Engagement Planning.C) Continuing Professional Development.D) Requirements of the Quality Assurance and Improvement Program.E) External Service Provider and Organizational Responsibility for Internal Auditing.F) Due Professional Carearrow_forwardMatch each of the following control activities with its definition. Control Activities Definitions 1. Separation of duties 2. Physical controls 3. Proper authorization 4. Employee management 5. Reconciliations 6. Performance reviews a. The company should maintain security over assets and accounting records.b. Management should periodically determine whether the amounts of physical assets of the company match the accounting records.c. The company should provide employees with appropriate guidance to ensure they have the knowledge necessary to carry out their job duties.d. The actual performance of individuals or processes should be checked against their expected performance.e. Authorizing transactions, recording transactions, and maintaining control of the related assets should be separated among employees.f. To prevent improper use of the company’s resources, only certain employees are allowed to carry out certain business activities.arrow_forwardPatrick Houghton was meeting with his manager to plan audit strategy in order to determine the amount of time to spend testing the client's internal controls and conducting detailed testing of transactions and account balances. Determining the audit strategy occurs during which phase of the audit? a. client acceptance stage b. planning stage c. performing stage d. reporting stagearrow_forward
- The conceptual framework refers to the concept of safeguards. Which of the following is an example of safeguards created by the firm? Policies and procedures that are designed to identify interests or relationships between the firm or its partners and professional staff and the firm's clients. Rotation of senior personnel who are part of the engagement team, and policies and procedures that are designed to identify interests or relationships between the firm or its partners and professional staff and the firm's clients. Rotation of senior personnel who are part of the engagement team, and policies and procedures that are designed to identify interests or relationships between the firm or its partners and professional staff and the firm's clients, and documented policies regarding the identification of threats to compliance with the rules, the evaluation of the significance of those threats. Documented policies regarding the identification of threats to compliance with the rules, the…arrow_forwardAny 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?arrow_forwardIn the world of professional industries, when conducting operational activities, top management have to be careful and well-conceived consideration is required so that it can be delivered in accordance with applicable rules and codes of ethics, as well as the manner in which the activities carried out are in line with the vision and goals of the company. To achieve the company's objectives faster and continually improve company performance, top management must be able to develop a routcome-based management strategy by obtaining detailed information and insights to support the decision-making process. For the purpose of drafting a conceptual framework in the form of organizational strategy, the leader hopes to help minimize risks that are detrimental to the company's activities, which in this case certainly requires the assistance of various parties, especially internal auditors that will help stakeholders by ensuring how the internal monitoring and control processes have been working…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage LearningAuditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub