...Sample Letter – Auditor’s Independence February 20, 201x The Board of Directors (or the Audit Committee) Sample View Regional Waste Management Services Commission 123 Main Street Sampleburg, Alberta T1X 1Z8 Dear Board/Audit Committee Members I have been engaged to audit the consolidated financial statements of the Sample View Regional Waste Management Services Commission for the year ending December 31, 201x. Canadian generally accepted auditing standards (GAAS) require that I communicate at least annually with you regarding all relationships between the Commission and me that, in my professional judgment, may reasonably be thought to bear on my independence. In determining which relationships to report, these standards require me to consider relevant rules and related interpretations prescribed by the appropriate provincial institute and applicable legislation, covering such matters as: a) holding a financial interest, either directly or indirectly, in a client; b) holding a position, either directly or indirectly, that gives the right or responsibility to exert significant influence over the financial or accounting policies of a client; c) personal or business relationships of immediate family, close relatives, partners or retired partners, either directly or indirectly, with a client; d) economic dependence on a client; and e) provision of services in addition to the audit engagement. I have prepared the following comments to facilitate my discussion with you regarding independence...
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...AUDITING PROCUREMENT CARDS (P-CARDS) BRAD TOMLINSON, ASSISTANT ADMINISTRATOR COMPUTER ASSISTED AUDIT GROUP OHIO DEPARTMENT OF TAXATION, AUDIT DIVISION Telephone 614-387-2068 Email: bradley_tomlinson@tax.state.oh.us WHAT ARE P-CARDS? An enhanced credit card used by business employees. It is similar to a MasterCard or Visa card, but contains more information that can be used to control purchases such as dollar limits and number of transactions within a given period or for an individual or group. (From PCMag.com) 1 WHY USE P-CARDS? • Reduce processing costs for invoices, purchase orders, check processing etc. • Increase efficiency and control • Assign cards to individuals or departments with variable controls • Set dollar limits per transaction or month • Limit to specific suppliers WHY USE P-CARDS? • Change purchasing authorization and spending criteria quickly and easily • Buy more efficiently online, saving money and streamlining processes • Better track spending with comprehensive, customized reports 2 FACTORS TO CONSIDER • Does the taxpayer have a written policy for P-card purchases? Spending cap? Restricted to departments? Restricted to accounts (travel & expense)? Restricted to certain personnel? Restricted to certain suppliers? FACTORS TO CONSIDER Does the taxpayer adhere to the policy? 3 FACTORS TO CONSIDER • Is the taxpayer a direct pay permit holder? Does the taxpayer exercise their direct...
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...explanations. Note: 11/2 marks each a. An attitude of “professional scepticism” is necessary if a CGA is to perform an audit engagement with due care. Which of the following best describes how a CGA may display an attitude of “professional scepticism” when performing an audit engagement? 1) 2) 3) 4) By assuming that management is dishonest in the absence of evidence to the contrary By not allowing clients’ staff to assist in the performance of an audit By rejecting all management assertions in the absence of supporting evidence By questioning all material assertions made by management b. Which of the following steps or modifications to an audit program is likely to be the most appropriate if an auditor assesses the risk of management fraud to be relatively high? 1) 2) 3) 4) c. Performing relatively less audit work at interim dates Placing greater reliance on management’s representations Performing less extensive tests of internal controls Assigning less experienced personnel to the engagement Generalized audit software, such as IDEA and ACL, can be used in a variety of ways during an audit engagement. Which of the following audit steps is a CGA most likely to perform using generalized audit software? 1) 2) 3) 4) Test compliance with a client’s internal controls. Implement a strategic systems-based audit of financial statements. Select a...
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...INTRODUCTION A financial audit, or more accurately, an audit of financial statements, is the verification of the financial statements of a legal entity, with a view to express an audit opinion. The audit opinion is intended to provide reasonable assurance that the financial statements are presented fairly, in all material respects, and/or give a true and fair view in accordance with the financial reporting framework. The purpose of an audit is to enhance the degree of confidence of intended users in the financial statements. 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. Financial audits are typically performed by firms of practising accountants who are experts in financial reporting. The financial audit is one of many assurance functions provided by accounting firms. Many organizations separately employ or hire internal auditors, who do not attest to financial reports but focus mainly on the internal controls of the organization. External auditors may choose to place limited reliance on the work of internal auditors. Internationally, the International Standards on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB) is considered as the benchmark for audit process. Almost all jurisdictions require auditors...
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... | | |Details of Subject | |Qualification |FNS60210 Advanced Diploma of Accounting | |Subject Name |Auditing and Reporting | |Details of Unit(s) of competency | |Unit Code |FNSACC602A |Unit Title |Audit and Report on Financial systems and records | |Details of Student | |Student Name | |Student ID | | |College | | |Student Declaration: I declare that the work submitted is my own, |Signature:...
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...Public Practice Audit Case Lectures and handouts by: Debbie Moy, BA. CGA 1 BC 2 – Assignment 1 • Submission requirements for BC2 • Assignment #1 • Task 1 — Review client communication 7 marks • Task 2 — Determine materiality and perform preliminary Analysis 9 • Task 3 — Assess inherent risk. 6 • Task 4 — Gain an understanding of the client's internal control environment and assess control risk. 4 24 marks 2 BC 2 – Assignment #2 • Task 5 — Design and perform tests of controls and dual-purpose tests. 10 marks 3 1 BC 2-Assignment #3 • Task 6 — Perform audit of cash and investments. 6 marks • Task 7 — Perform audit of accounts receivable. 10 » 16 marks 4 BC 2 – Assignment #4 • Task 8 — Perform audit of inventory. • 7 marks • Task 9 — Perform audit of accounts payable. 6 13 marks 5 BC 2 – Assignment #5 • Task 10 — Complete the audit. 35 marks Total: 100 marks 6 2 BC2- Introduction Public Practice Audit Case Contains: • Part 1 Client Background • Part 2 W/P Preparation. • Part 3 Student tasks. • Part 4 Working papers (ie. W/P) • Part 5 Permanent File • Part 6 Client documents • Part 7 Blank W/Ps’ 7 BC2 Topics in Audio Tapes: • Welcome to BC2- Public Practice Audit Case! • Introduction • Student tasks (#1 to #10) • FAQ from students • Disposition sheet and Deficiency List • Handouts • Lecturer’s ideas for success! 8 BC2 Introduction: • How long does BC2 take to do? • Computer requirements: ...
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...digits d. Adequate documents 3. Should the auditor feel, after obtaining an understanding of the EDP internal control structure, that control risk cannot be reduced, he or she will a. Issue a disclaimer b. Issue an adverse opinion c. Increase the sample size for tests of controls d. Expand the substantive testing portion of the audit 4. The real-time feature normally would be least useful when applied to accounting for a firm’s a. Bank-account balances b. Property and depreciation c. Customer accounts receivable d. Merchandise inventory 5. A sample in which the characteristics in the sample are the same as those of the population is a a. Random sample c. Attributes sample b. Variables sample d. Representative sample 6. Establishing a route through the random number table a. Is an arbitrary decision b. Needs to be done in advance of choosing the numbers c. Is essential and the route must be followed consistently d. Requires that all three of the above is true 7. When an auditor goes through a population and selects items for the sample without regard to their size, source, or other distinguishing characteristics, it is called a. Block selection b. Haphazard selection c. Systematic selection d. Statistical selection 8. Which of the following may be used to reduce the risk of...
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...BC2 Public Practice Audit Case By: Debbie Moy, BA. CGA 1 BC2- Introduction Public Practice Audit Case Contains: • Part 1 Client Background • Part 2 W/P Preparation. • Part 3 Student tasks. • Part 4 Working papers (ie. W/P) • Part 5 Permanent File • Part 6 Client documents • Part 7 Blank W/Ps’ 2 BC2 Table of Contents: 1. Welcome to BC2- Public Practice Audit Case! 2. Introduction 3. Student tasks (#1 to #10) 4. FAQ from students 5. Disposition sheet and Deficiency List 6. Handouts 7. Lecturer’s ideas for success! 3 1 BC2 Introduction: • How long does BC2 take to do? • Computer requirements: - Windows 2000 or higher - CaseWare (CGA version) - Internet access 4 BC2 Student Tasks • Task 1: Review client acceptance and engagement letter, takeover letter, and reply. . Task 2: Perform preliminary analysis. • Task 3: Determine materiality and assess risk. • Task 4: Gain an understanding of the client’s internal control and assess control risk. • Task 5: Design and perform tests of controls and dual purpose tests. 5 BC2 Student Tasks • Task 6: Perform audit of cash. • Task 7: Perform audit of accounts receivable using dollar unit sampling. • Task 8: Perform audit of inventory. • Task 9: Perform audit of accounts payable using non-statistical sampling. • Task 10: Complete the audit. 6 2 BC2 P. 3 Student Tasks • • • • • Client acceptance Establish Independence Obtain understanding of client’s business Perform preliminary analysis...
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...AICPA. These questions were released by the AICPA with letter answers only. Our editorial board has provided the accompanying explanations. Please note that the AICPA generally releases questions that it does NOT intend to use again. These questions and content may or may not be representative of questions you may see on any upcoming exams. 2007 AICPA Newly Released Questions – Auditing 1. CPA-05465 Which of the following categories is included in generally accepted auditing standards? a. b. c. d. Standards of review. Standards of planning. Standards of fieldwork. Standards of evidence. ANSWER: Choice "c" is correct. Generally accepted auditing standards include three categories: general standards, standards of fieldwork, and standards of reporting. Choices "a", "b", and "d" are incorrect, based on the above explanation. 1 2007 AICPA Newly Released Questions – Auditing 2. CPA-05466 A retailing entity uses the Internet to execute and record its purchase transactions. The entity's auditor recognizes that the documentation of details of transactions will be retained for only a short period of time. To compensate for this limitation, the auditor most likely would: a. b. c. d. Compare a sample of paid vendors' invoices to the receiving records at year-end. Plan for a large measure of tolerable misstatement in substantive tests. Perform tests several times during the year, rather than only at year-end. Increase the sample of transactions to be selected for cutoff tests. ...
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...Companies Act, Cap 486, of the laws of Kenya, a limited company must maintain: a. Cashbook b. Asset register c. Ledgers d. Shareholders’ register The first three books are statutory books of accounts that must be kept by companies at their registered offices. iii. Vouchers: these are documents in support of transactions in the books of account e.g. an agreement, a receipt, invoice, debit and credit notes etc. the auditor will check a voucher for: a. Authorization: whether it was authorized by the rightful authority. b. Date: whether it is of the current period under audit. c. Recording: whether it is recorded in the correct books of account. d. Whether it is for the business: whether it relates to the company’s ordinary transactions. iv. Opinion: this is expressed in an audit report submitted to the shareholders...
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...Project: Compliance Auditing | Final DraftAdvanced Auditing | | | | | OUTLINE I. Compliance Audits a. Objective, Scope, and Methodology b. Regulations II. Features & Benefits a. Assessment of overall security b. Exposures that create the greatest risk c. Internal Controls III. The Compliance Audit Process d. Interviews and Reviews e. Preparation f. Procedural Component IV. Conclusion Compliance Auditing Compliance auditing determines whether a process or transaction has or has not followed applicable rules. If rules are violated, the auditor determines the cause and recommends ways to prevent future deviations. The rules being tested can be those created by the organization for itself through corporate by-laws, policies, plans, and procedures; can be those imposed on the organization through external laws and regulations; or can be those external standards that the organization has chosen to follow. In addition Compliance auditors gather evidence regarding fraudulent or abusive activity affecting governmental entities. Their audits are designed to detect and deter the misappropriation of public assets and to reduce future fraud risks. (Associates, 2003) Compliance auditors must have the skills to research issues effectively using authoritative materials, understand how to apply the knowledge gained to the circumstances being tested, and be able to explain to the organization...
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......................................................................................................... ii CHAPTER ONE ........................................................................................................................... 1 ThE GEnEral aUDiTinG EnvironmEnT .............................................................................. 3 CHAPTER TWO ......................................................................................................................... 23 ThE aUDiTor anD ThE CompaniES aCT............................................................................. 25 CHAPTER THREE ..................................................................................................................... 47 aUDiT planninG, ConTrol & rECorDinG (iSa 300)........................................................ 49 CHAPTER FOUR ....................................................................................................................... 61 ThE aCCoUnTinG anD inTErnal ConTrol SYSTEmS (iSa 400).................................... 63 FraUD anD Error (iSa 240)...
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...Email me if there is any problem or if you need help with your other classes assignments, problems or quizzes. ewood6449@gmail.com Auditing and Assurance Services, 14e (Arens) Chapter 1 The Demand for Audit and Other Assurance Services Learning Objective 1-1 1) The Sarbanes-Oxley Act applies to which of the following companies? A) All companies. B) Privately held companies. C) Public companies. D) All public companies and privately held companies with assets greater than $500 million. Answer Terms: Sarbanes-Oxley Act Diff: Easy Objective: LO 1-1 AACSB: Reflective thinking skills Topic: SOX 2) Which of the following is considered audit evidence? A) Oral statements Written Auditor made by management Communications Observation Y N N B) Oral statements made by management N C) Oral statements made by management Y Written Communications Y Auditor Observation Y Written Communications Y Auditor Observation Y D) Oral statements made by management N Answer Terms: Audit evidence Diff: Moderate Objective: LO 1-1 AACSB: Reflective thinking skills Written Communications N Auditor Observation Y 3) Evidence is paramount to audit and attestation engagements. List the four basic types of audit evidence. 4) The criteria by which an auditor evaluates the information under audit may vary with the information being audited. A) True B) False Terms: Criteria which an auditor evaluates information Diff: Easy Objective: LO 1-1 AACSB: Reflective thinking skills 5) The criteria used...
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...Chapter 5: Audits were scheduled after a comprehensive risk assessment of the entire organization was performed. Thus, the internal auditing organization tried to ensure that important risks were being addressed. Douglass said he wished the FBI worked that way, instead it was forced to constantly react to emergencies. The first thing you do when you are assigned an internal audit or an external audit is to set audit objectives. This task is what makes it an audit and not a fishing expedition. Generally, the audit objectives of an internal audit will correspond to the type of audit: operational, financial, or compliance. After the audit objectives are known, then a preliminary survey is done to understand as much about the auditee’s operations as possible. This survey entails interviewing key employees, observing operations, and reading or examining documents and records. When the preliminary survey is completed, then an audit program is written, listing the audit procedures that will be done during the audit. A budget is then estimated based on the audit program. For large, public companies a brainstorming session is required. Once they have completed the audit tests, the auditors can review the evidence gathered and reach conclusions which are then reported to management. Once the report is issued and managements responds, then a follow-up visit is made to ensure that the issues identified in the audit report are addressed. Walker told Douglass that the modern internal auditing...
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...divisions and subsidiaries in the organization. | B. | Measuring performance and awarding bonuses based on short-term operating results. | C. | Giving employees performance feedback that considers positive and constructive praise along with critical and negative observations on their work. | D. | Establishing work teams that share responsibilities, performance, and bonuses based on collective efforts. | | | 3. | Which of the following is not considered one of the three factors increasing the probability of fraud? A. | Motive. | B. | Lack of training. | C. | Opportunity. | D. | Rationalization. | | | 4. | Which of the following is ordinarily considered an extended procedure during the independent audit of financial statements? A. |...
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