Connect Access Card for Principles of Auditing & Other Assurance Services
21st Edition
ISBN: 9781260299366
Author: Ray Whittington, Kurt Pany
Publisher: McGraw-Hill Education
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Chapter 5, Problem 21RQ
To determine
Evaluate the statement related to related parties.
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When a CPA has accepted an engagement from a new client who is amanufacturer, it is customary for the CPA to tour the client’s plant facilities. Discuss theways in which the CPA’s observations made during the course of the plant tour will be ofhelp in planning and conducting the audit.
Analytical procedures are a critical part of audit work.
Describe at least three different analytical procedures and explain how to perform each. Specify what the results will reveal about the client.
An audit engagement letter should normally include which of the following matters of agreement between the auditor and the client?a. Schedules and analyses to be prepared by the client’s employees.
b. Methods of statistical sampling the auditor will use.
c. Specification of litigation in progress against the client.
d. Client representations about availability of all minutes of meetings of the board of directors.
Chapter 5 Solutions
Connect Access Card for Principles of Auditing & Other Assurance Services
Ch. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Distinguish among routine, nonroutine, and...Ch. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - As part of the verification of accounts receivable...Ch. 5 - Prob. 9RQCh. 5 - When in the course of an audit might the auditors...
Ch. 5 - Prob. 11RQCh. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14RQCh. 5 - Prob. 15RQCh. 5 - Prob. 16RQCh. 5 - Prob. 17RQCh. 5 - Prob. 18RQCh. 5 - Prob. 19RQCh. 5 - What disclosures should be made in the financial...Ch. 5 - Prob. 21RQCh. 5 - Prob. 22RQCh. 5 - Prob. 23RQCh. 5 - Prob. 24RQCh. 5 - Prob. 25RQCh. 5 - Prob. 26RQCh. 5 - Prob. 27RQCh. 5 - Prob. 28RQCh. 5 - Prob. 29RQCh. 5 - Prob. 30RQCh. 5 - Prob. 31RQCh. 5 - I have finished my testing of footings of the cash...Ch. 5 - Prob. 33RQCh. 5 - Prob. 34RQCh. 5 - Financial statements contain a number of...Ch. 5 - Prob. 36QRACh. 5 - In an audit of financial statements, the auditors...Ch. 5 - Prob. 38QRACh. 5 - Prob. 39QRACh. 5 - Prob. 40QRACh. 5 - Prob. 41QRACh. 5 - Prob. 42QRACh. 5 - Prob. 43QRACh. 5 - Prob. 44QRACh. 5 - Prob. 45AOQCh. 5 - Prob. 45BOQCh. 5 - Prob. 45COQCh. 5 - Prob. 45DOQCh. 5 - Prob. 45EOQCh. 5 - Prob. 45FOQCh. 5 - Prob. 45GOQCh. 5 - Prob. 45HOQCh. 5 - Prob. 45IOQCh. 5 - Prob. 45JOQCh. 5 - Prob. 45KOQCh. 5 - A difference of opinion concerning accounting and...Ch. 5 - Prob. 46OQCh. 5 - Prob. 47OQCh. 5 - Prob. 48AOQCh. 5 - Prob. 48BOQCh. 5 - Prob. 48COQCh. 5 - The cost of analytical procedures in terms of time...Ch. 5 - Prob. 48EOQCh. 5 - Prob. 49OQCh. 5 - Prob. 50PCh. 5 - Prob. 51PCh. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - Prob. 56P
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Similar questions
- Explain the purpose of an engagement letter which is signed immediately after the appointment with the audit client, and ANY FIVE (5) of its main contents.arrow_forwardAfter the financial statements are issued, auditors finish the substantive procedures. Identify the most frequently performed auditing tasks.arrow_forwardAn IT auditor is performing a test of the company's user access administration process, and has selected a random sample of 25 user access requests to evaluate. The IT audit test procedures revealed that 1 of the 25 sampled user access requests has not been properly authorized according to company policy. As a key next step in the IT audit process, the IT auditor should (select the BEST response): a) Communicate this concern to the Chief Executive Officer as soon as possible. b) Communicate this concern to the Audit Committee as soon as possible. c) Disregard the finding entirely. d) Perform additional audit procedures to better understand the risks related to the issue, as well as the root cause of the problem.arrow_forward
- 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 appropriatelyarrow_forwardPermanent files serve as handy reference source for new staff members in acquainting themselves with the client and for more experienced auditor in planning the current year’s audit. TRUE OR FALSE? WHY?arrow_forwardIn deciding whether to accept a new manufacturing client, the auditor arranges a tour of the manufacturing plant. In your words elaborate the information the auditor may obtain during the tour that will help in planning and conducting the audit if client is accepted.arrow_forward
- Is it allowed to send copies of the auditor's earlier paperwork to the client? If yes, are there any special criteria that auditors should review prior to delivering the client's documentation? At least three things should be mentioned.arrow_forwardIs it OK to give the client copies of the auditor's previous documents? If so, what should the auditors look for before giving the documentation to the client? At least three things.arrow_forwardAlthough the quantity, type, and content of audit documentation will vary with thecircumstances, audit documentation generally will include the(1) copies of those client records examined by the auditor during the course of theengagement.(2) evaluation of the efficiency and competence of the audit staff assistants by thepartner responsible for the audit.(3) auditor’s comments concerning the efficiency and competence of client management personnel.(4) auditing procedures followed and the testing performed in obtaining audit evidence.arrow_forward
- List the three reasons why an experienced member of the audit firm must thoroughly review audit documentation at the completion of the auditarrow_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, (i) After a careful review of the budget for data security enhancement projects, you feel the budget appears to be adequate. Identify the problems and explain them in relation to the internal environment.arrow_forwardChoose the one correct answer. Which of the following audit approaches is most likely to provide an auditor the most confidence in an internal control procedure's effectiveness? *performing analytical proceduresinspection of supporting documentsinquiry of the client's management and personnelconducting a tour on client's premisesarrow_forward
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