future in the absence of known conditions to the contrary. a 4.) An auditor only provides reasonable assurance. Which of the following reasons supports such idea? a. Because inherent limitations exist in regards the client's accounting and internal control systems. b. Because auditors assume that most assertions presented by the client management are not verifiable. c. Because most auditors do not follow the Philippine Standards on Auditing. d. All of the above. b 5.) Which one of the
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individually or when aggregated with other misstatements, assuming there are no related controls. (The likelihood that a material misstatement exists in the financial statements without the consideration of internal control.) Control risk = the risk that a material misstatement that could occur in a relevant assertion will not be prevented, or detected and corrected on a timely basis by the client’s internal control. Detection risk = the risk that the auditor will not detect a misstatement that
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Askew ACCT217 July 26, 2014 Fraud Theory and Prevention is getting a lot of attention these days, however preventing fraud and understanding fraud continues to puzzle corporations and is the focus of many studies and reasons why many internal controls are in place today. As an example Dr. Donald Cressey a fraud expert developed what is known as the Fraud Triangle Theory which essentially states that three elements must be present in order for fraud to occur and those are, Motive, Opportunity
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receivables systems of Seeley Co. Audit documentation is available from the previous year’s audit, including internal control questionnaires and audit programmes for the despatch and sales system. The audit approach last year did not involve the use of computerassisted audit techniques (CAATs); the same approach will be taken this year. As far as you are aware, Seeley’s system of internal control has not changed in the last year. Client background – sales system Seeley Co is a wholesaler of electrical
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LJB Company Internal Control Recommendations There are two primary goals of internal controls. The first is to safeguard its assets from employee theft, robbery, and unauthorized use. The second goal is to enhance the accuracy and reliability of its accounting records. This is done by reducing the risk of errors and fraudulent activities in the accounting process. Public companies are now required by regulations Sarbanes-Oxley Act of 2002 (SOX) among them to formalize control procedures in
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the opportunity to plan and go through with a scheme because he was the CFO. He had the power, the control and the knowledge of how the money was handled at this company. He was able to enter journals entries and override them as well. He was the last person to see the entries which made it easy for him to change it after other employees. McKinley also was involved in setting up the internal control system there, so he was very familiar with the operations and knew how to get around the system without
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SMACKEY DOG FOODS, INC. Smackey Dog Foods, Inc., is a privately owned dog food manufacturing company, which was started by three sisters, Sarah, Kim, and Jillian, in the kitchen of their suburban Chicago home. They started by manufacturing a natural dog food with ingredients they bought from a local grocery store. These products were discovered by local pet stores and small grocery stores which also became distributors of their products. A larger facility was then needed as the demand steadily
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Auditing Chapters 6 & 7 Exam J. Martin, Instructor Auditing Chapters 6 & 7 Exam J. Martin, Instructor Student Name____Cory Anderson_________________________________________________________ 1 C | 16 A | 31 D | 46 True | 2 B | 17 A | 32 D | 47 False | 3 B | 18 B | 33 A | 48 False | 4 C | 19 C | 34 B | 49 True | 5B | 20 D | 35 D | 50 False | 6 A | 21 D | 36 C | | 7 A | 22 A | 37 B | | 8 D | 23 D | 38 A | | 9 D | 24 B | 39 C | | 10 B | 25 D | 40 C | | 11 D
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dream and that I am very passionate about opening up this business and making it a very profitable one. I feel that I have a firm grasp of how to properly run a daycare center, the accounting practices that impact a daycare center as well as the controls needed to safeguard assets to ensure that we stay in compliance and adhere to all regulations set forth. My plan is to start this business inside my home with the name of “Babies & Beyond” located in Somerset, New Jersey, see how well I do, and
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* A detailed understanding of appropriate control policies and procedures in computer systems * An ability to read and understand system documentation * Experience in planning computer audits and in using modern computer auditing techniques. All internal auditors may not possess expertise in all of these areas. However, there is certainly
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