Auditing: A Risk Based-Approach to Conducting a Quality Audit
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
Question
Chapter 4, Problem 1TFQ
To determine

Introduction: Audit firms are organizations that conduct audit engagements. An audit firm may have more than one auditor in the form of its partners. The audit engagements are signed by any partner of the firm.

To identify: Whether the given statement is true or false.

Expert Solution & Answer
Check Mark

Answer to Problem 1TFQ

The given statement is false.

Explanation of Solution

An audit firm conducts audit engagements of their clients and it is usually not likely to face litigation costs. Audit firms keep the documentation of each process of audit engagement and conclusions are drawn. The recording of sufficient documents and pieces of evidence reduced the risk of future litigations which is why the audit firm is not likely to see the litigation costs as the highest single cost. Hence, the given statement is false.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
In an attempt to reduce business costs, and given the current competitive business environment, audit tendering is sometimes used for large audits. REQUIRED Identify the advantages and disadvantages of audit tendering.
Explain how SOX has affected audit firms.
"it would be more cost-efficient if our internal auditors will performed all the audits. " WHAT IS THE IMPORTANCE OF HAVING INTERNAL, EXTERNAL AND GOVERNMENT AUDITORS REGARDLESS OF THE COST IT INCURRS?

Chapter 4 Solutions

Auditing: A Risk Based-Approach to Conducting a Quality Audit

Knowledge Booster
Similar questions
    • SEE MORE QUESTIONS
    Recommended textbooks for you
  • Auditing: A Risk Based-Approach (MindTap Course L...
    Accounting
    ISBN:9781337619455
    Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
    Publisher:Cengage Learning
    Business/Professional Ethics Directors/Executives...
    Accounting
    ISBN:9781337485913
    Author:BROOKS
    Publisher:Cengage
    Principles of Accounting Volume 1
    Accounting
    ISBN:9781947172685
    Author:OpenStax
    Publisher:OpenStax College
  • 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
    Contemporary Auditing
    Accounting
    ISBN:9781337650380
    Author:KNAPP
    Publisher:Cengage
    Intermediate Accounting: Reporting And Analysis
    Accounting
    ISBN:9781337788281
    Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
    Publisher:Cengage Learning
  • Auditing: A Risk Based-Approach (MindTap Course L...
    Accounting
    ISBN:9781337619455
    Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
    Publisher:Cengage Learning
    Business/Professional Ethics Directors/Executives...
    Accounting
    ISBN:9781337485913
    Author:BROOKS
    Publisher:Cengage
    Principles of Accounting Volume 1
    Accounting
    ISBN:9781947172685
    Author:OpenStax
    Publisher:OpenStax College
    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
    Contemporary Auditing
    Accounting
    ISBN:9781337650380
    Author:KNAPP
    Publisher:Cengage
    Intermediate Accounting: Reporting And Analysis
    Accounting
    ISBN:9781337788281
    Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
    Publisher:Cengage Learning