Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 21, Problem 35QRA
Steve Ankenbrandt, president of Beeb Corp., has been discussing the company’s internal operations with the presidents of several other multidivision companies. Ankenbrandt discovered that most of them have an internal audit staff. The activities of the staffs at other companies include financial audits, operational audits, and sometimes compliance audits.
Required:
Describe the meaning of the following terms as they relate to the internal auditing function:
- a. Financial auditing.
- b. Operational auditing.
- c. Compliance auditing.
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Steve Ankenbrandt, president of Beeb Corporation, has been discussing the company’s internal operations with the presidents of several other multidivision companies. Ankenbrandt discovered that most of them have an internal audit staff. The activities of the staffs at other companies include financial audits, operational audits, and sometimes compliance audits.
Required:
Describe the meaning of the following terms as they relate to the internal auditing function:
a. Financial auditing.
b. Operational auditing.
c. Compliance auditing.
Lajod Company has an internal audit department consisting of a manager and three staff auditors. The manager of internal audits, in turn,reports to the corporate controller. Copies of audit reports are routinely sent to the auditcommittee of the board of directors as well as to the corporate controller and the individualresponsible for the area or activity being audited.The manager of internal audits is aware that the external auditors have relied on theinternal audit function to a substantial degree in the past. However, in recent months,the external auditors have suggested there may be a problem related to the objectivity ofthe internal audit function. This objectivity problem may result in more extensive testingand analysis by the external auditors.The external auditors are concerned about the amount of nonaudit work performedby the internal audit department. The percentage of nonaudit work performed by theinternal auditors in recent years has increased to about 25% of their total…
Your company, Tractors, Inc., is employing the SDLC for its new information system. You have been chosen as a member of the development team because of your strong accounting background. This background includes a good understanding of both financial and managerial accounting concepts and required data. You also possess a great understanding of internal control activities. You do not, however, fully understand exactly what the internal auditors will need from the system in order to comply with Section 404 of the Sarbanes-Oxley Act. Lay out the fact-gathering techniques you might employ to increase your understanding of this important component of your new system.
Chapter 21 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 21 - Prob. 1RQCh. 21 - Prob. 2RQCh. 21 - Prob. 3RQCh. 21 - Prob. 4RQCh. 21 - Prob. 5RQCh. 21 - Prob. 6RQCh. 21 - Prob. 7RQCh. 21 - Prob. 8RQCh. 21 - Prob. 9RQCh. 21 - Prob. 10RQ
Ch. 21 - Prob. 11RQCh. 21 - Prob. 12RQCh. 21 - Prob. 13RQCh. 21 - Prob. 14RQCh. 21 - Prob. 15RQCh. 21 - Prob. 16RQCh. 21 - Prob. 17RQCh. 21 - Prob. 18RQCh. 21 - Prob. 19RQCh. 21 - Prob. 20RQCh. 21 - Prob. 21RQCh. 21 - Prob. 22RQCh. 21 - Prob. 23RQCh. 21 - Prob. 24RQCh. 21 - Prob. 25RQCh. 21 - Prob. 26RQCh. 21 - Prob. 27RQCh. 21 - Prob. 28RQCh. 21 - Prob. 29RQCh. 21 - Explain how major federal assistance programs are...Ch. 21 - Describe what is meant by a questioned cost.Ch. 21 - Distinguish between a subrecipient and a primary...Ch. 21 - Prob. 33RQCh. 21 - Prob. 34QRACh. 21 - Steve Ankenbrandt, president of Beeb Corp., has...Ch. 21 - Prob. 36QRACh. 21 - Prob. 37QRACh. 21 - Prob. 38QRACh. 21 - Prob. 39QRACh. 21 - Prob. 40QRACh. 21 - Prob. 41QRACh. 21 - Prob. 42QRACh. 21 - Prob. 43AOQCh. 21 - Prob. 43BOQCh. 21 - Prob. 43COQCh. 21 - Prob. 43DOQCh. 21 - Prob. 43EOQCh. 21 - Prob. 43FOQCh. 21 - Prob. 43GOQCh. 21 - Prob. 43HOQCh. 21 - Prob. 43IOQCh. 21 - Prob. 43JOQCh. 21 - Prob. 43KOQCh. 21 - Prob. 43LOQCh. 21 - Prob. 44OQCh. 21 - Prob. 45OQCh. 21 - Prob. 46PCh. 21 - Devry Corporation has established an independent...Ch. 21 - Prob. 48PCh. 21 - Prob. 49PCh. 21 - Prob. 50ITC
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- 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.arrow_forwardAssume 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?)arrow_forwardYou are an audit supervisor assigned to a new client which is listed on a Stock Exchange. You visited the corporate headquarters to become acquainted with key personnel and to conduct a preliminary review of the company’s accounting policies, controls, and systems. During this visit, (c) You learned that the financial vice president manages a staff of five internal auditors. Identify the problems and explain them in relation to the internal environment.arrow_forward
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