Replace a low assessed level of control risk as evidence

Assignment Help Accounting Basics
Reference no: EM13859663

1. What is the relationship between U. S. AND International Auditing Standards?


2. Alan, a CPA is participating in an audit engagement of ABC Company. He has performed the audit and has determined that an unqualified opinion is to be issued but he would like to expand on the rationale for the unqualified opinion. Please describe the five situations in which an explanatory paragraph would be necessary in an unqualified opinion


3.  - Based upon the below 4 situations - explain your position of "why" or "why not" the following circumstances would have violated the professions ethical standards when you are a practicing CPA?

- 1. Expressed an unmodified opinion on the current year's financial statements when fees for the prior year's audit were unpaid.

- 2. Recommended a controller's position description with candidate specifications to an audit client.

- 3. Purchased a CPA firm's practice of monthly write-ups for a percentage of fees to be received over a 3 year period.

- 4. Made arrangements with a financial institution to collect notes issued by a client in payment of fees due for the current year's audit.

4. There are four major sources of legal liability for a CPA. In addition there are defenses to such liability. List the sources of legal liability and provide at least one defense to each liability you state.

5. Describe the six related audit transaction objects and indicate whether they pertain solely to Sarbanes Oxley or non-publicly traded companies.

1. What is the difference between a significant deficiency and a material weakness as it relates to internal Control? How does the presence of one material deficiency affect the auditor's report on internal controls under the PCAOB standards? Likewise how does a material weakness impact the auditor's report on internal controls under the PCAOB standards?


2. Business risk must be assessed in performing an audit.

(a) Define business risk in association with an audit and describe several sources of such risk.

(b) How does business risk relate to the performance of preliminary analytical procedures in an audit?

(c) There are four major areas in planning an audit engagement and there are subparts to each of the four major areas. Please identify the four major areas and the subparts that are associated with the major areas.


3.  Audit Risk consists of inherent risk, control risk, and detection risk.

(a) Please completely define each of the above.

(b) Indicate whether each of the statements below is true or false and explain your position:

(1) The risk that material misstatement will not be prevented or detected on a timely basis by internal controls can be reduced to zero by having effective controls in place.

(2) Detection Risk is a function of the efficiency of an auditing procedure.

(3) Cash is more susceptible to theft than an inventory of coal because it has greater inherent risk?

(4) The Inherent risk of the theft of an inventory of cellphones at a mall store is greater than the misappropriation of cash at a COSTCO Store?


4.  Auditing standards define a confirmation as the "process of obtaining and evaluating a direct communication from a third party in response to a request for information about a particular item affecting financial statement assertions." What are the two assertions for which confirmation of accounts receivable balances provides primary evidence. Select one of the below options and EXPLAIN your reasons why you selected that option.

(a) Completeness and Valuation

(b) Valuation and Rights and Obligations.

(c) Rights and obligations and existence.

(d) Existence and Completeness


5.  Utilizing the "Auditing Through the Computer Approach" explain what types of procedures you would perform as an auditor in evaluating an online order processing system. Name a control that could compensate for inadequate segregation of duties in a computer system.


6.  When considering the use of Management's written representations as audit evidence about the completeness of an assertion, an auditor should understand that such representations - select one of the answers that best completes this sentence and explain your response:

(a) Constitute sufficient evidence to support the assertion when considered in combination with a sufficiently low assessed level of control risk.

(b) Complement, but do not replace, substantive tests designed to support the assertion.

(c) Are not part of the evidence considered to support the assertion.

(d) Replace a low assessed level of control risk as evidence to support the assertion.

Reference no: EM13859663

Questions Cloud

Model of aggregate demand : Consider the following model of aggregate demand, in which there is no international trade, the price level is fixed, and the symbols are defined as in class (all dollar amounts in billions):
How jit ordering methodology different from eoq methodology : How much would the TC increase if the order quantity must be 1,000 units? How is JIT (just-in-time) ordering methodology different from EOQ methodology?
Constructing a data set : For this assignment, you will download a data set from the University of Michigan Panel Survey Of Income Dynamics. Note that during this process you will need to create an account.
Locate a credible website : Select any disease or disorder of your choice. Locate a credible website (hint: government websites such as CDC or NIH, medical association websites such as American Lung Association, Cerebral Palsy Association, etc)   Describe the disease process in..
Replace a low assessed level of control risk as evidence : Replace a low assessed level of control risk as evidence to support the assertion
Overweight patients have increased levels of ldl : A group of 10 overweight patients have increased levels of LDL (low-density lipoprotein) cholesterol. Based on this limited information and using the scientific method: I. Develop a question followed by a hypothesis.
Differentiates foreign exchange trading : Prepare a paper that differentiates foreign exchange trading within Asia as compared to Europe and the Americas. Evaluate theses flexible and fixed exchange rate systems within this international context.
How are jan actions helping to build an adaptive firm : How are Jan's actions helping to build an adaptive firm? Give three specific examples. Be sure to describe and define adaptive firm in your answer
What is the marginal propensity to save : Complete the table. What is the marginal propensity to save? What is the marginal propensity to consume? Draw a graph of the consumption function. Then add the investment function to obtain C + I.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Angela purchased a car for 30000 by putting 20 down in cash

part a angela purchased a car for 30000 by putting 20 down in cash with the balance due as a note payable. journalize

  Prepare a break-even analysis to calculate the number of

your client is planning to open her own architectural firm for the reasons discussed above. one of her concerns is the

  Prepare the adjusting entry to record bad debts expense

Sales revenues are $800,000 for 2012, sales returns and allowances are $45,000, and the allowance for doubtful accounts has a credit balance of $9,000. Prepare the adjusting entry to record bad debts expense in 2012.

  The machine using the straight-line method

Recorded depreciation on the machine using the straight-line method

  Sniffing out fraudulent activity

What other data points should auditors look out for when sniffing out fraudulent activity?

  What is the net income for the current fiscal year

What is the net income for the current fiscal year? Is it up or down from the prior year? Why would this information be important to investors?

  Bernard creighton is the controller for creighton hardware

bernard creighton is the controller for creighton hardware store. inputting together the cash budget for thr fourth

  Record these transitions in ralph laurens journal and show

may4 sold clothing on account to a mexican department store for 71000 the exchange rate of the mexican peso is 0.10 and

  Compute the revised annual depreciation

Compute the revised annual depreciation on each asset in 2007. Prepare the entry to record depreciation on the building in2007.

  Carol and jerry llp pays the good eats cafe each month for

what are the tax issues for the following casecarol and jerry llp pays the good eats cafe each month for the lunches

  Problem 5-16 applying overhead in a service company lo2 lo3

problem 5-16 applying overhead in a service company lo2 lo3 lo4 leeds architectural consultants uses a job-order

  On 30th november 2009 mr ali submitted a tender for sale of

ali is running hyper star traders a soleproprietorship business located at the mall road lahore. at theyear end the

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd