a.
Introduction: Audit documentation is a process of document preparation where an auditor clearly explains about the
To define:The purpose of audit standards in promoting the audit quality and its underlying principles.
b.
Introduction: Audit documentation is a process of document preparation where an auditor clearly explains about the audit procedure. The details of evidence gathered, and the analytical procedure is included in the audit document which an auditor considers while assessing the documents submitted by the company.
To define:Tthe audit evidence that is necessary for opening on the client’s financial statement.
c.
Introduction: Audit documentation is a process of document preparation where an auditor clearly explains about the audit procedure. The details of evidence gathered and the analytical procedure is included in the audit document which an auditor considers while assessing the documents submitted by the company.
To define:The way by which audit documentation provides the evidence to ensure audit quality.
d.
Introduction: Audit documentation is a process of document preparation where an auditor clearly explains about the audit procedure. The details of evidence gathered, and the analytical procedure is included in the audit document which an auditor considers while assessing the documents submitted by the company.
To define:The audit activities which are conducted during the audit opinion formulation process to provide reasonable assurance about a client’s financial statements.
e.
Introduction: Audit documentation is a process of document preparation where an auditor clearly explains about the audit procedure. The details of evidence gathered, and the analytical procedure is included in the audit document which an auditor considers while assessing the documents submitted by the company.
To define:The way by which professional judgment and ethical decision making contribute to audit quality.
Want to see the full answer?
Check out a sample textbook solutionChapter 5 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
- A risk in using “risk-based auditing” is that if the auditor applies a wrong rating in assessing particular risks, sufficient audit evidence may not be obtained to provide reasonable assurance on those areas. Using the scenario outlined below: ABC Ltd.’s principal business activity is the assembly of circuit boards. One of the key materials used is copper wiring, all of which is imported. As a cost-cutting measure, a contract with a new overseas supplier was signed, and all of the company’s copper wiring is now supplied under this contract. Purchases are denominated in a foreign currency, but the company does not use forward exchange contracts in relation to its imports of copper wiring. The company has two production facilities, one of which produces goods for the export market, and the other produces goods for the domestic market. About half of its goods are exported, but the export market is suffering due to competition from cheaper producers overseas. Most domestic sales are made…arrow_forwardWhen an auditor-client conflict arises during an audit engagement, the client and/or the current auditor may sometimes employ another accounting firm to offer an impartial report on the problem at the core of the conflict - as occurred during Deloitte's 1997 audit of Livent. Discuss the responsibility of accounting firms when they are contracted to provide such a report.arrow_forwardMr. Mohammed, the auditor of Sunrise LLC planned the audit properly and performed it in accordance with ISA’s. But some material misstatements of the financial statements could not be detected. Which one of the following is the reason for this? Deficiencies in internal controlInherent limitation of an internal controlInherent limitation of an auditInternal control is not effectivearrow_forward
- Which of the following is one of the changes in the Revised ISA 700 on audit reporting? a. the audit opinion will now become more like a guarantee on the fairness of the financial statements b. all of the above c. the opinion is required to be presented first, unless law or regulation may prescribe alternate presentation d. the auditor’s responsibility paragraph include a statement that the auditor will now proactively search for fraudarrow_forwardReed, CPA, accepted an engagement to audit the financial statements of Smith Company. Reed’s discussions with Smith’s new management and the predecessor auditor indicated the possibility that Smith’s financial statements may be misstated due to the possible occurrence of errors, fraud, and illegal acts. a. Identify and describe Reed’s responsibilities to detect Smith’s errors and fraud. Do not identify specific audit procedures b. Describe Reed’s responsibilities to detect Smith’s material noncompliance with laws. Do not identify specific audit procedures. c, Identify and describe Reed’s responsibilities to report Smith’s noncompliance with laws. Auditors must consider the possibility of fraud by employees or management on every audit engagement. They must also consider the possibility that the client has not complied with laws. (a) Distinguish between employee and management fraud. (b) Describe the auditors' responsibility for the detection of fraud in an audit. (c) Describe the…arrow_forward
- 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
- Business/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:Cengage