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
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Question
Chapter 5, Problem 15TFQ
To determine
Introduction: Audit is a procedure of verifying or examining the correctness of the financial statements of a company. Auditisperformed by a professional expert who has the relevant knowledge and experience.
To state:Whetherthe given statement is true or false.
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Students have asked these similar questions
Explain auditors’ responsibilities with respect to a client’s failure to comply with laws or regulations.
Is it necessary for an auditor to understand the client's internal control if the auditor does not plan to depend on it throughout the audit? Explain.
What are the auditor’s responsibilities to communicate information to the audit committee under PCAOB standards? If the auditor discovers that the audit committee routinely ignores such communications especially when they are critical of management’s use of GAAP in the financial statements, what step(s) might the auditor take at this point?
Chapter 5 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 5 - Prob. 1TFQCh. 5 - Prob. 2TFQCh. 5 - Prob. 3TFQCh. 5 - Prob. 4TFQCh. 5 - Prob. 5TFQCh. 5 - Prob. 6TFQCh. 5 - Prob. 7TFQCh. 5 - Prob. 8TFQCh. 5 - Prob. 9TFQCh. 5 - Prob. 10TFQ
Ch. 5 - Prob. 11TFQCh. 5 - Prob. 12TFQCh. 5 - Prob. 13TFQCh. 5 - Prob. 14TFQCh. 5 - Prob. 15TFQCh. 5 - Prob. 16TFQCh. 5 - Prob. 17TFQCh. 5 - Prob. 18TFQCh. 5 - Prob. 19TFQCh. 5 - Prob. 20TFQCh. 5 - Prob. 21TFQCh. 5 - Prob. 22TFQCh. 5 - Prob. 23TFQCh. 5 - Prob. 24TFQCh. 5 - Prob. 25MCQCh. 5 - Prob. 26MCQCh. 5 - Prob. 27MCQCh. 5 - Prob. 28MCQCh. 5 - Prob. 29MCQCh. 5 - Prob. 30MCQCh. 5 - Prob. 31MCQCh. 5 - Which of the following accounts would not be...Ch. 5 - Prob. 33MCQCh. 5 - Which management assertion addresses whether the...Ch. 5 - Prob. 35MCQCh. 5 - Prob. 36MCQCh. 5 - Prob. 37MCQCh. 5 - Prob. 38MCQCh. 5 - Prob. 39MCQCh. 5 - Prob. 40MCQCh. 5 - Prob. 41MCQCh. 5 - Prob. 42MCQCh. 5 - Prob. 43MCQCh. 5 - Prob. 44MCQCh. 5 - Prob. 45MCQCh. 5 - Prob. 46MCQCh. 5 - Prob. 47MCQCh. 5 - Prob. 48MCQCh. 5 - Prob. 49RSCQCh. 5 - Prob. 50RSCQCh. 5 - Ray, the owner of a small company, asked Holmes,...Ch. 5 - Prob. 52RSCQCh. 5 - Prob. 53RSCQCh. 5 - Prob. 54RSCQCh. 5 - Professional guidance indicates that the auditor...Ch. 5 - Prob. 56RSCQCh. 5 - Assume that an organization asserts that it has...Ch. 5 - Prob. 58RSCQCh. 5 - Prob. 59RSCQCh. 5 - Prob. 60RSCQCh. 5 - Prob. 61RSCQCh. 5 - Prob. 62RSCQCh. 5 - Prob. 63RSCQCh. 5 - Prob. 64RSCQCh. 5 - Prob. 65RSCQCh. 5 - Prob. 66RSCQCh. 5 - Prob. 67RSCQCh. 5 - Prob. 68RSCQCh. 5 - Prob. 69RSCQCh. 5 - Prob. 70RSCQCh. 5 - Prob. 71RSCQCh. 5 - Prob. 72RSCQCh. 5 - Prob. 73RSCQCh. 5 - Prob. 74RSCQCh. 5 - Prob. 75RSCQCh. 5 - Prob. 76RSCQCh. 5 - Prob. 77RSCQCh. 5 - Prob. 79RSCQCh. 5 - Prob. 80RSCQCh. 5 - Prob. 81RSCQCh. 5 - Prob. 82RSCQCh. 5 - Prob. 83RSCQCh. 5 - Prob. 84RSCQCh. 5 - Prob. 85RSCQCh. 5 - Prob. 86RSCQCh. 5 - Prob. 87RSCQCh. 5 - Prob. 89RSCQCh. 5 - Prob. 90FFCh. 5 - Prob. 91FF
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Similar questions
- If an auditor does not intend to rely on internal controls in the audit, does the auditor needto obtain an understanding of the client’s internal control? Explain.arrow_forwardDefine the obligations of auditors in the event that a client fails to comply with applicable laws or regulations.arrow_forwardBased on the Sarbanes Oxley act, what are some of the activities that an auditing firm cannot be involved with in respect to their audit client? Please explain.arrow_forward
- Why is it important for auditors to consider the possibility of fraud by employees or management on every audit engagement? Why must they consider the possibility that the client has not complied with laws.arrow_forwardIs it necessary for an auditor to get a knowledge of a client's internal controls if the auditor does not plan to depend on the client's internal controls in the course of the audit? Explain.arrow_forwardThe auditor prepares the financial statements for DecoPaints SAOG while also serving as the auditor for DecoPaints SAOG Company. By having the auditor review his or her own work, the auditor cannot be expected to form an unbiased opinion on the financial statements. Which threat may occur when a previous judgment needs to be re-evaluated by the professional accountant responsible for that judgment? Intimidation threats Advocacy threats Self-review threats Self-interest threatsarrow_forward
- The company being audited has an internal auditor who is both competent and objective.The independent auditor wants to assign tasks for the internal auditor to perform. Under these circumstances, the independent auditor maya. Allow the internal auditor to perform certain tests of internal controls. b. Allow the internal auditor to audit a major subsidiary of the company. c. Not assign any task to the internal auditor because of the internal auditor’s lack of independence. d. Allow the internal auditor to perform analytical procedures but not be involved with any tests of details.arrow_forwardA company's records for auditing have been destroyed. Would it be okay if the auditor asked the client to reproduce the data.arrow_forwardAuditors are important because they are able to provide assurance of an organization's financial statements from an objective and independent opinion. It benefits the company in several ways, such as maintaining consistency, finding errors in their processing, or detecting fraud. While performing work , the auditors may face situations when they will not be able to fulfill ethical requirements. Answer the following three questions based on the above case By having the auditor review his or her own work, the auditor cannot be expected to form an unbiased opinion on the financial statements. Which threat may occur when a previous judgment needs to be re-evaluated by the professional accountant responsible for that judgment? a. Self-review threats b. Advocacy threats c. Intimidation threats d. Self-interest threatsarrow_forward
- Many companies request that their auditors provide them with other services, such as tax or consultancy, as well as the external audit. Discuss the arguments for and against auditors providing non-audit services.arrow_forwardChoose the correct.Which of the following is not a way by which the Sarbanes–Oxley Act attempts to ensure auditor independence from an audit client?a. The auditing firm must be appointed by the client’s audit committee.b. Audit fees must be approved by the Public Company Accounting Oversight Board.c. The audit committee must be composed of members of the client’s board of directors who are independent of the management.d. The external auditor cannot also perform financial information system design and implementation work.arrow_forwardWhich of the following is not a way by which the Sarbanes–Oxley Act attempts to ensure auditor independence from an audit client?a. The auditing firm must be appointed by the client’s audit committee.b. Audit fees must be approved by the Public Company Accounting Oversight Board.c. The audit committee must be composed of members of the client’s board of directors who are independent of the management.d. The external auditor cannot also perform financial information system design and implementation work.arrow_forward
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