a friendly, non-threatening way and ascertained that she did not come from a wealthy background. Also, the auditor should have vouched invoices related to the costs of goods sold, and inquired of the audit committee about their review of credit card statements, internal control procedures. The audit committee should have been reviewing monthly financial statements, bank
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significance generally attached by the business man to the functions of the auditor and his reports. These functions, and the scope of these reports, have in the past been definitely related to the character of and changes in business activity. Audits and reviews are basically procedures performed on the financial statements of a company, for the purpose of determining whether the financial statements include any material misstatements. Misstatements are essentially wrong numbers due to numerical
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Cost Audit Cost Audit in EDP environment When planning the cost audit, the cost auditor should consider an appropriate combination of manual and computer-assisted audit techniques (CAATs). In determining whether to use CAATs, he should take into account: i) His computer knowledge, expertise and experience. ii) Availability of CAATs and suitable computer facilities. iii) Impracticability iv) Effectiveness and efficiency. v) Timing. In an EDP environment, the control
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ascertaining the control systems are summarized as follows: * Examining previous audit work, * Client’s own documentation of the system, * Interviews with client’s staff, * Tracing transactions, * Examining client’s documents, * Observation of procedures. a. Examining previous audit work: The audit work should provide a record of the previous audit and how the system operates. Any change in the audit work should be documented for updating. b. Clients own documentation of
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reporting according to the auditing decisions of __ Auditing Firm. ___ Auditing Firm has performed the audit in agreement with the rules and regulations normally accepted accounting principles put forth by the Financial Accounting Standards Board and the Government Accounting Standards Board. The rules and regulations of each standard board want __ Auditing Firm to prepare effectively and carry out the audit to establish reasonable assurance of the financial statements. The financial statements must demonstrate
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compute key liquidity, solvency, activity, and profitability ratios for 1997 and 1998. Given these data, comment on what you believe were the high-risk financial statement items for the 1998 Should auditors insist that their clients accept all proposed audit adjustment, even those that have an “immaterial” effect on the given financial statements? According to section 312.10 of the PCAOB standards, “the auditor’s consideration of materiality is a matter of professional judgment and is influenced by
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Tong Chai MA82501 Spring 2012 Case 1.3 Just For FEET, Inc. 2. Just for Feet operated large, high-volume retail stores. Identify internal control risks common to such businesses. How should these risks affect the audit planning decisions for such a client? For the large, high-volume retail stores, I identified the following internal control risks common to such businesses: * Management operating strategy is the top source of all the issues. Most retail stores are pretty decentralized and
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D. Equally, impartially, and openly 3. The Independence Principle in the AICPA Code applies to: A. All accountants and auditors B. All CPAs regardless of professional services C. All CPAs who render attestation services D. All members of the audit committee 4. In stage 1 of Kohlberg's model, ethical reasoning is motivated by: A. Fear of punishment B. Satisfaction of one's needs C. Following the law D. Acting based on universal ethical principles 5. Professional judgment in accounting
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Affect Being in the accounting profession for close to eight years, I have seen how large of a role ethics plays. While I have never done or been asked to do anything that could be considered unethical, I have come to realize that in accounting there is a lot of gray area. Many principles are left for interpretation and in some cases little guidance is given. In these cases ethics becomes of the upmost importance. Early in the chapter, Mark Cheffers and Micael Pakulauk raise the question of
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at the entity's place of business. B. they are not employees of the entity being audited. C. they are paid by parties outside of the audited entity. D. they report to users outside of the audited entity 5:B 12.Independent auditors perform audits on the financial reports of public companies. This type of auditing can best be described as: A.a discipline that assures financial information presented by management. B.an activity whose purpose is to search for irregularities. C.a regulatory
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