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Audit Planning and Control

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Submitted By ganyuma6
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Pages 4
Jessica Ganyuma

Audit Planning and Control
Professor:
August 23, 2015

Ernst & Young is an accounting firm founded by Arthur Young (1863-1948) and Alwin C Earnest ((1881- 1948). Alwin started Ernst and Ernst with his brother Theodore in 1903. Arthur formed his accounting firm with his brother Stanley named Arthur Young and Company in 1906. Both companies were a success and quickly emerge into the global marketplace. Around 1924 both firms “ allied with prominent British firms”( ). Ernst and Young never met one anther and died days of each other. Their firms combined in 1989 forming Ernst &Young. Ernst & Young provides audit, tax, business risk, technology and security risk services and human capital services worldwide. Ernst & Young is one of the “Big Four” accounting firms. The company has over 190,000 employees and operates in over 150 companies. There are steps in planning an audit and designing an effective audit program. When it comes to planning the auditor must first decide whether or not to accept a new client. The audior must identify “ whey the client wants or needs and audit” (p 209). The auditor must obtain an understanding with the firm about the terms of engagement to avoid any misunderstanding and the auditor must develop “an overall strategy for the audit, including engagemetnet staffing and any required audit specialists” (209).

When it comes to designing an effective audit program the auditor must first “ use risk assessment procedures to determine the appropriate emphasis on each of the other four types of tests, the specified audit procedures for each type of test must be designed”(p. 412). First the auditor must test the operating effectiveness of control policies and procedures in support of a reduced assessed control risk. There has to be testing for monetary

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