...Chapter 1 An Introduction to Assurance, Auditing, and Related Services A. Assurance Services 1. Which of the following statements best describes assurance services? a. Independent professional services that are intended to enhance the credibility of information to meet the needs of an intended user. b. Services designed to express an opinion on the fairness of historical financial statements based on the results of an audit. c. The preparation of financial statements or the collection, classification, and summarization of other financial information. d. Services designed for the improvement of operations, resulting in better outcomes. Assurance engagements performed by professional accountants are intended to enhance the credibility of information about a subject matter by evaluating whether the subject matter conforms in all material respects with suitable criteria, thereby improving the likelihood that the information will meet the needs of an intended user. The level of assurance provided by the professional accountant’s conclusion conveys the degree of confidence that the intended user may place in the credibility of the subject matter. 2. Which of the following is not an assurance service? a. Examination of prospective information b. Audit of historical financial statements c. Review of financial statements d. Compilation of financial information Services performed by professional accountants that are not assurance engagements include the following: ...
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...Auditing and Assurance Introduction The essay is mainly discussing that Transval Ltd wants to hire a new auditing team and depend on the request that be given to the new auditor, whether the new auditor should accept the offer to audit for Transval Ltd or not. Upon that, the essay also talks about the threats to the objectivity as an auditor and the ways to mitigate these threats. Last part of the essay is talking about the risks that could cause misstatements to the financial statements and how quality control can mitigate them. A) Firstly, according to the information given from the case, there is a part of inventory not located at Transval Ltd. This part of inventory is located at customers’ premises which means Transval Ltd has to count inventory quarterly from each customer. Consider about this, there might be a misstatement happened here. Auditors have to get the right and overall information from the company to do the audited accounts. There is a possibility that the information like financial accounts from the customers’ companies are not overall or if there is any mistake in it, the auditor will not know. The audited account will not be accurate if that happened. Secondly, the firm’s most of existing customers are from the retail and service sectors. So as an auditor from this kind of firm might not have enough experience on the company like Transval Ltd. Transval Ltd is a company which make plastice balls for use in the injection moulding business. The...
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...CONTEMPORARY BUSINESS LAW Session 1 – Introduction to Law/Australian Legal System _______________________________________________________________________________ 1. WHAT IS LAW? 1.1 Legal Terms A Law - A particular legal rule. The Law - A declaration of behaviour in our society. - A comprehensive and changing set of rules. Jurisprudence - The general principles underlying the law: the foundation for the making of the law. Natural Law - The principles of reason and justice which flow from the law of nature (or the law of God) and which form the foundation of our legal system. Religious Law - What is right and wrong? Rationalist Law - What is reason? 1.2 Foundation for Democratic Law Natural law is based on the notions of the laws of God and reason/common sense – ie, a combination of Religious and Rationalist law. We see direct examples of Christian teachings in our law. A notable example is the case of Donoghue v Stevenson which is a major case in the law of tort. John Locke explained that natural law involved a fundamental belief that all men are equal and will, therefore, equally respect and not harm each other. His view inspired the core principle of the American Declaration of Independence and, as a result, two of the most impacting speeches: American Declaration of Independence: “We hold these truths to be...
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...AC 31611DE AC 316 (M) 2013 Page 1 of 4 UNIVERSITY OF SWAZILAND FACULTY OF COMMERCE DEPARTMENT OF ACCOUNTING MAIN EXAMINATION PAPER MAY 2013 DEGREE! DIPLOMA: BACHELOR COMMERCE OF COMMERCE NIP! DIPLOMA IN YEAR OF STUDY B. COM III (Fff)! DIPLOMA IN COMMERCE IV (IDE) TITLE OF PAPER PRINCIPLES OF AUDITING COURSE CODE AC316! IDE AC316 (M) MAY 2013 TOTAL MARKS 100 MARKS TIME ALLOWED THREE (3) HOURS INSTRUCTIONS 1 There are four (4) questions, answer all. Begin the solution to each question on a new page. The marks awarded for a question are indicated at the end of each question. 2 3 Note: You are reminded that in assessing your work, account will be taken of accuracy of the language and general quality of expression, together with layout and presentation of your answer. THIS PAPER IS NOT TO BE OPENED UNTIL PERMISSION HAS BEEN GRANTED BY THE INVIGILATOR OR SUPERVISOR. SPECIAL REQUIREMENTS: COMPANIES ACT EXTRACT Page 2 of 4 Case study Croppers Swaziland is a member of Croppers, a multinational professional services firm headquartered in Sidney, Australia. Chelsea limited has appointed Croppers Swaziland as their auditors. The company was incorporated in Swaziland on 01 March 2012. The authorised and issued share capital of the company is 55 000: El shares. Sandile Khumalo, popularly known as 'SK' amongst his peers is the audit senior in the Chelsea engagement. He is a very competent clerk and his audit work has been credited as one of the best in the...
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...HUISWERK WEEK 3 (E6 C32 & E8 C39) + OPGAVE E7 DQP 29 & 31 Case 6-32 a. A review provides limited assurance about the fair presentation of financial statements in accordance with generally accepted accounting principles but far less assurance than an audit. Presumably, the bank decided that the assurances provided by a review were needed before a loan could be approved, but an audit was not necessary. A review includes a CPA firm performing analytical procedures, making inquiries about the fair presentation of the statements, and examining the information for reasonableness. Because of a CPA firm’s expertise in accounting, the accountant from the CPA firm can often identify incorrect presentations in the financial statements that have been overlooked by the accountant of the company. Reviews are common for smaller privately-held companies with relatively small amounts of debt. The bank probably did not require an audit because the additional cost of an audit was greater than the benefit the bank perceived. In many cases, the decision as to whether to have a review or an audit is negotiated between the company seeking a loan and the bank loan officer. Both the company and the bank have options in negotiating such things as the amount of the loan, the rate of interest, and whether to require an audit or a review. The bank can reject the loan request and the company can go to other banks that want to make loans. Frequently, banks have a list of CPA firms in which they...
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...Auditing, Attestation, & Assurance Services Paper Auditing, Attestation, & Assurance Services Auditing, attestation and assurance are various financial services provided for an organization based on their individual needs. The needs of companies differ as will the scope of their auditing, attestation and/or assurance service requirements. Auditing boasts both a formal definition and an informal one which describe the accounting function in its basic form as well as its interpretive meaning to the individual responsible for the function, the very core of the profession; ensuring the integrity of financial data as presented. Assurances are defined as “independent professional services that improve the quality of information, or its context, for decision makers (which) encompasses attest services and financial statement. Attest services occur when a practitioner is engaged to issue a report on subject matter, or an assertion about subject matter that is the responsibility of another party” (Accounting Concern, 2015). Auditing Service Boynton & Johnson (2006), describes auditing as “a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users” (p. 6). An audit is part of the overall assurance service that specifically targets information in the financial statements...
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...Auditing, Attestation, and Assurance Services ACC491 Auditing, Attestation, and Assurance Services This paper discusses and analyzes three different services provided by Certified Public Accountants (CPAs), namely: auditing, attestation, and assurance services. Surprisingly, assurance service is the broadest term among three. It includes auditing and attestation services. The most commonly heard service, auditing, is the narrowest service that a CPA firm provides. The attestation service lies in between auditing and assurance. Each of these services is valuable to the public and the clients requesting these services. For each service, the team will first give a definition, and provide an example of each service. Team C also discusses who would use these types of services as well as the reason behind doing so. Finally, the team will provide some research about what standards apply to each service and what organization establishes them. Auditing Auditing is “a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users” (Boynton & Johnson, 2006, p. 6). An example of auditing is auditing a company’s financial statements. “ A financial statement audit involves obtaining and evaluating evidence about an entity’s presentation of its financial position, results of operations...
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...Auditing & assurance Case 1.2 1. Consider the principles, assumptions and constraints of Generally Accepted Accounting Principles. Define the revenue recognition principle and explain why it is important to users of financial statements. According to the revenue recognition principle, revenues are recognized when they are realized or realizable, and are earned. Thus, it does not matter when the cash is received. To break that definition down, revenues are realized when products are exchanged for cash or claims to cash. Revenues are realizable when related assets received are readily convertible to cash or claims to cash. Revenues are earned when the products are delivered or services are performed. It is important for a company to abide by this principle as it is will help investors. By not recognizing revenues when the goods or services are delivered or performed, investors are given false information. If a company is paid before they deliver a good, they have not technically earned that revenue yet. By deferring revenue in such a way, investors are provided with overstated numbers, which makes the company seem like they are performing better than they actually are. 2. Provide one example of how WorldCom violated the revenue recognition principle in this situation. WorldCom violated the revenue recognition principle when they made “top-side adjusting journal entries, often very large, that were allegedly made during the quarterly closing process in order to hit revenue...
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...UNIVERSITY OF SWAZILAND Institute of distance education ECON 104 Assignment 1 Maphuzu Dlamini 138176 Diploma in Commerce Level 2 28 January 2012 Question 1 Taxation in Swaziland Definition This is the compulsory transfer of funds from the private sector to the public sector also known as the fiscal levies. They are a form of government finance in order to finance economic and social objectives of the country. The forms of taxation in Swaziland Taxation can either be direct or indirect. Direct tax is the one levied on income or corporate profits .Namely income tax .Whereas indirect tax is the one levied on goods and services such as the sales tax or value –added tax and customs and excise duties. So as they are explained below; a) Sales tax/VAT; this is tax payable on imports both at importation and on goods manufactured and specified services supplied in the country thus is charged at specific rates. This is known as indirect tax as it is implemented on goods and services and is implemented according to the sales tax act. Thus as the Swaziland Revenue Authority is planning to implement the value added tax from the 1st April this year. b) Customs and excise goods; these are tariffs charged on goods outside the country and into the country. Although being a member of the South African Customs Union (SACU), Swaziland shares the same tariffs as those under SACU. They are liable to customs duties and for the same classes of goods also excise duties. Sales tax is also payable...
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...discuss the annual report of the Dodge Corporation. He owns Dodge Corporation shares and just received the annual report. He says “PricewaterhouseCoopers prepared the audited financial statements and gave an unqualified opinion, so my investment must be safe.” Required What misconceptions does your neighbour seem to have about the auditor’s role with respect to Dodge Corporation? Question 3 (13 marks) You work for a large public accounting firm with many offices across the country. As part of your new job as a senior manager in the national office, you have been assigned to do a quality control review of the Pop Shop Company audit file, for the audit conducted by one of your offices in north west Manitoba. Your firm has been auditing the Pop Shop Company for the last four years, ever since Pop Shop went public. There may be a problem with the financial statements, as the bank did not recently renew the bank loan, and Pop Shop is scrambling to meet payroll costs. It is also having trouble getting additional financing. There is some concern that the company may have tried to prepare its financial statements in a more favourable light. It is now April 2013 and your firm is planning to issue an...
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...There are many fraud risk factors indicated in the dialogue. Among the fraud risk factors are the following: * Two individuals, Saul and the store manager, appear to dominate management without any compensating controls. * The supplier does not have any support for the transactions, nor do they have a phone number or an address where they can be reached. The oral confirmation by phone call could have been an insider posing as the vendor. * No one is getting bonuses. Even though it’s a new company, management generally doesn’t operate without bonuses – it’s possible they are getting incentives from other sources. * It is a new company and new companies are always susceptible to errors and fraud until solid controls and history is established. * The audit partner doesn’t seem interested in following up on Yosef’s suspicions. He could be careless, could be involved, or may just have a different sense of the overall picture than Yosef. b. Waseem has many misconceptions regarding the consideration of fraud in the audit of the financial statements that are contained in the dialogue. Among Kent’s misconceptions are the following: * Waseem is not concerned about the suspicious vendor. * Waseem seems more interested in keeping the client than offending the client by inquiring about the suspicious vendor. c. SAS 99 requires that auditors document the following matters...
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...MINI-CASES | |Question | |Case |1 |2 |3 |4 |5 |6 |7 | | | | | | | | | | |1. Andersen: An Obstruction of Justice? |C.83 |C.83 |C.83 |C.83 |C.83 |B.63 |C.83 | |2. PTL Club—The Harbinger of Things to Come | | | | | | | | |3. GM |11.74 |11.74 |11.74 |11.74 |11.74 |11.74 | | | |12.65 |12.65 |12.65 | | | | | | | | | | | | | | |4. Unhealthy Accounting at HealthSouth |4.64 |4.64 |5.70 |5.70 |C.82 |G.84 | | | | | | | | | | ...
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...Auditing and Assurances Eighth Edition Week One Homework 1-26: a. Auditing evidence could be defined as the more relevant and accompanying data and information which helps the auditor in their evaluation of financial documents. b. The management of an accounting firm will ultimately make the assertions about the many parts of the financial statements that they are handling or are in question. Such assertions are a tool to assist them in making sure that they have not overlooked any components that might be detrimental to the overall integrity of their reports. For example, if a given financial institution lists accounts that might be receivable for a specific amount, the management is “asserting” that such receivables are truly in the institution’s possession and are appropriately valued or appraised and are not just “approximations.” c. When searching for and evaluating evidence auditors must be concerned about the reliability and relevance of the evidence that they are utilizing in their reports. Otherwise, invalid derivations and conclusions will be reached in regards to the management’s assertions. Furthermore, the reliability of the evidence that they use will attest as to the ability of such evidence to show the real state of their assertions. 1-27: a. There are many phases to an audit that is to be evaluated and executed properly. First of all, auditors must determine if they are going to accept a new client or continue with a client that is already using them...
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...Learning Team, Auditing, Attestation, and Assura Purchase here http://chosecourses.com/acc-491-week-2-learning-team-auditing-attestation-and-assura Description ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assurance Services Paper 1 ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assura Purchase here http://chosecourses.com/acc-491-week-2-learning-team-auditing-attestation-and-assura Description ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assurance Services Paper 1 ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assura Purchase here http://chosecourses.com/acc-491-week-2-learning-team-auditing-attestation-and-assura Description ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assurance Services Paper 1 ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assura Purchase here http://chosecourses.com/acc-491-week-2-learning-team-auditing-attestation-and-assura Description ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assurance Services Paper 1 ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assura Purchase here http://chosecourses.com/acc-491-week-2-learning-team-auditing-attestation-and-assura Description ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assurance Services Paper 1 ACC 491 Week 2, Learning Team, Auditing, Attestation...
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...Auditing Introduction Letter University of Phoenix ACC 546 Auditing Introduction Letter To: Management of Apollo Shoes From: Martin & Associates, CPA Re: Auditing and Assurance Services Thank you for the opportunity to present the benefits and services that our firm offers. This letter is intended to explain the benefits of each option, our role in providing the available assurance services, and the qualifications required to meet the standard for the services offered. Martin & Associates has been serving our clients for ten years with a strong emphasis on the auditing and assurance services. Our firm takes pride in building trusting relationships, while performing an effective audit to aid in the success of our clients. First and foremost we must understand what auditing and assurance services are. According to Wikipedia, “The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project, or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, quality management, and energy conservation.” When it comes to accounting audits are performed to establish the validity and reliability of information that is being reviewed, in addition to provide an assessment of the internal control system. The main goal of an audit is to express an opinion on the information that is being reviewed based on work that is being done on a test basis. Our firm’s...
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