Audit Problem 6-32 pg. 172 A) The bank decided that the assurances provided by a review would be needed before the large loan would be approved, but the audit was something Rene wanted. 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
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of the standard is determining where the line should be drawn between these relationships and the auditor’s ability to maintain these relationships and the independence considered necessary to give an unbiased opinion when it comes time to write a report that is unprejudiced and reliable to the public and investors at large. Let us begin with Health Management’s CEO Clifford Hotte and CFO Drew Bergman’s 1995 inventory fraud scandal by which author Michael C. Knapp’s assertion could be considered
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For this question, please state either that no report should be issued or what specific type of report should be issued (such as compilation, review, audit, etc.) and what that report will be on, such as on the financial statements, on internal controls, etc. You should also include if any disclaimers should also be issued. a. A compilation report should be issued that describes what the compilation engagement was and an opinion. b. A review report should be issued and it should describe the review
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lead to a misrepresentation of the audit. Brent could also ignore Han and Megan’s advices and to the work correctly, regardless of making budget. This approach will get the job done correctly. However, doing this will result in an over budget audit report and may receive a bad evaluation from the senior auditor. Brent could also talk with John about his concerns. John may be able to provide insight into Brent’s issues and help him resolve them. However, John may see Brent as a threat to him completing
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the organisations’ annual reports, including analysis that focuses on changes and developments within the financial markets and their impact on your chosen organisations. You can add critical comparison of the chosen organisations, examining the implications of your findings. On the basis of ratio analysis, comment and compare about the key financial aspects (liquidity, solvency, activity, profitability and market position analysis) of both companies. Finally prepare a report on the comparative performance
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In addition, if an auditor is independent, the motivation to do a better audit is not undermined as the auditor will report misstatements (Pike, 2003). Stewart (1994) in Porter and Simon et al., (1996), likened independence to the “corner stone of auditing”. This means if the auditors are not independent of parties and other factors; it may affect their view on the audit report making the audit function have no value (Porter and Simon et al., 1996). An independent auditor adds value to the financial
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fairly stated in all material respects. This study also recommends that audit standards setters and regulators consider changes in the type of assurance provided for accounts with extreme estimation uncertainty and the form and content of the audit report. I agree with this because some estimates reported in public company financial statements contain extreme measurement uncertainty and this would outstrip the auditor’s ability to provide a high level of positive assurance that financial statements
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modifications and opinions of an audit report. An audit report is a crucial part in the auditing process. It is a guide for users of the financial information. Auditors issue opinions on the financial statements based on certain criteria. The main thing is if the financial statements are presented in accordance to GAAP. Also, modifications can occur after the opinion is issued. Modifications vary depending on the issue at hand. Changes in principles or a report involving other auditors are a few
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mandates that are part of the Sarbanes-Oxley Act. QUESTION 2) WHAT DOES CARMICHAEL SEE AS THE UNDERLYING MISSION OF THE PCAOB? Carmichael views the underlying mission of the PCAOB to be the restoration of the public’s confidence in the auditor’s reports and findings. Accounting scandals, involving companies like Enron and WorldCom, prompted Congress to adopt the Sarbanes-Oxley Act as a means to establish control over accounting and auditing functions. A main focus of Sarbanes-Oxley was the establishment
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to vote on organizational matters such as a board of directors. It also helps them make decisions on whether or not to buy or sell stock. As for creditors, an audit report serves a basis for realizing performance. With this they are able to make loan decisions and analyze risk. As far as the community as a whole, an audit reports shows true performance and therefore helps others understand its ability for future growth. With that being said, people have a chance to make investment decisions for
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