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For each of the following situations, describe how risk of material misstatement should be assessed and what effect the assessment will have on detection risk.
(i) Johnson is a fast-growing trucking company. The company is publicly held, but Ivan Johnson and his sons control 55% of the shares. Mr Johnson is Chairman of the Board and Chief Executive Officer (CEO). He personally makes all major decisions with little consultation with the Board of Directors. Most of the directors, however, are either members of the Johnson family or long-standing friends. The board basically rubber-stamps Mr Johnson's decisions.
(ii) The Focus Bank has been your client for the past two years. During that period, you have had numerous arguments with the president and the controller over a number of accounting issues. The major issue is related to the bank's reserves for loan losses and the value of collateral. Your prior audits have indicated that a significant adjustment is required each year to the loan loss reserves.
Audit Approach - Audit of Accounting Estimates The accounting and auditing matters are mainly concerned along with recognizing the point in time at that the initial disclosure
Sufficiency of audit evidence The audit evidence should in total enable the auditor to form an opinion on the financial statements. Sufficiency is a measurement of the quantity
Advantage and Disadvantage of Judgmental Sampling The advantages of judgment sampling The approach is understood as well and has been refined through experience o
Factors Affecting and Controlling Occupational Health (i) Walking-Working Surface Workers must work or move on different surfaces while working. Such - surfaces are cha
Identify and explain FIVE risks to independence arising in carrying out your audit
Audit Work on the Holding Company We will focus on the verification of investments in subsidiary companies. 1. Get a schedule that should contain the following information. A
The International Auditing and Assurance Standards Board (IAASB) is an independent standard-setting body that serves the public interest by setting high-quality international stand
how EDP audit is carried out
Permanent Audit File The permanent audit file might involve, inter alia: a) A copy of the enterprise's statutes or statutory documents and other legal governing the enterpr
Why is studying Auditing different from studying other accounting topics?
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