All Matches
Solution Library
Expert Answer
Textbooks
Search Textbook questions, tutors and Books
Oops, something went wrong!
Change your search query and then try again
Toggle navigation
FREE Trial
S
Books
FREE
Tutors
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Ask a Question
Search
Search
Sign In
Register
study help
business
auditing international approach
Questions and Answers of
Auditing International Approach
Auditors determine the audit procedures to be performed for a specific account by reference toa. Audit objectives for that account.b. Generally accepted auditing standards.c. AICPA sanctioned
Control risk assessment procedures include all of the following excepta. Inspection of documents.b. Observation of procedures.c. Confirmation of bank balances.d. Inquiry of client personnel.
A basic premise underlying analytical procedures is thata. These procedures cannot replace tests of details of balances and transactions.b. Statistical tests of financial information may lead to the
Evidence of the performance of control risk assessment procedures includes all of the following excepta. Flowcharts.b. Lead schedules.c. Questionnaires.d. Memoranda.
Which of the following is ordinarily designed to detect possible material dollar errors in the financial statements?a. Control risk assessment procedures.b. Analytical procedures.c. Computer
An auditor's working papers shoulda. Not be permitted to serve as a reference source for the client.b. Not contain critical comments concerning management.c. Show that the accounting records agree or
Working papers ordinarily would not includea. Initials of the in-charge auditor indicating review of the staff assistants' work.b. Cut-off bank statements received directly from the banks.c. A memo
In connection with a lawsuit, a third party attempts to gain access to the auditor's working papers. The client's defense of privileged communication will be successful only to the extent it is
Which of the following statements ordinarily is correct concerning the content of working papers?a. Whenever possible, the auditor's staff should prepare schedules and analyses rather than the
The permanent file of an auditor's working papers generally would not includea. Bond indenture agreements.b. Lease agreements.c. Working trial balanced. Flowchart of the internal control.
The audit working paper that reflects the major components of an amount reported in the financial statements is thea. Interbank transfer schedule.b. Carry-forward schedule.c. Supporting schedule.d.
An auditor ordinarily uses a working trial balance resembling the financial statements without foot-a. Cash flow increases and decreases.b. Audit objectives and assertions.c. Reclassifications and
During an audit engagement, pertinent data are compiled and included in the audit working papers. The working papers are primarily considered to bea. A client-owned record of conclusions reached by
Match the term or terms with the related description. Each term may be used once, more than once, or not at all. Description 1. The auditor expresses an opinion on the fairness with which the
The general audit objectives apply to all financial statement accounts. The general objectives are used to determine specific audit objectives for each account.a. Describe the specific audit
Indicate the audit objectives that are accomplished by the following audit procedures:a. Confirmation of the cash bank balance with the bank.b. Analysis of inventory turnover.c. Review of a copy of a
Classify the following audit procedures as (1) control risk assessment procedures, (2) tests of details of balances and transactions, or (3) analytical procedures. Give reasons for your
Analytical procedures are useful substantive tests.Required:a. Explain why analytical procedures are considered substantive tests.b. Explain how analytical procedures are used in the audit planning
Indicate whether you would expect to find the following documents in the permanent audit file or the current-year audit file.a. A letter from a customer confirming an account balance.b. A memorandum
Using the indexing method described in this chapter, index the following audit working papers.a. Notes receivable confirmation control schedule.b. Analysis of allowance for doubtful accounts.c. Test
Indicate whether the following matters would require (1) an adjusting entry, (2) a reclassification entry, or (3) a footnote disclosure. Give reasons for your answers.a. An uncollectible account
Review the following audit working paper and list the deficiencies in its preparation. Hogeye Ranch Company Cattle Inventory Average Quantity Price Bulls 10+ $3,000 Amount $ 30,000 Steers 35+ 500*
Grace Mature was conducting a training class for new audit staff assistants. She was trying to emphasize the need for them to think about proper auditing procedures rather than merely relying on the
Describe what the auditor does in each of the following sections of an audit.a. Planning.b. Studying and testing internal control.c. Performing substantive tests.d. Issuing the audit report.
Paraphrase the section or sections of the scope and/or opinion paragraphs that refer or allude to the following terms:a. Material.b. Risk.c. Sampling.
Describe six quantitative and five qualitative factors auditors may consider when making materiality decisions.
Why do auditors make preliminary estimates of materiality for the total financial statements?
Why do auditors make preliminary estimates of materiality for the individual accounts in the financial statements?
Explain two alternative courses of action that the auditor can follow if the total misstatement in the fi- nancial statements is more than materiality for the total financial statements.
Describe the sequence the auditor might use in applying the concept of audit risk to planning the audit.
Name the five general assertions in financial statements.
Describe the four steps the auditor takes to set an acceptable risk of not detecting material misstatements in an assertion.
Describe the two sources of detection risk that can be identified and controlled by the auditor.
Give two versions of the audit risk model
Demonstrate with percentages the inverse relationship between (1) detection risk and inherent risk and (2) detection risk and control risk.
Why is the audit risk model not normally used in the evaluation of audit evidence?
Why is it inappropriate to apply the audit risk model to business risk?
Which of the following parts of the audit is described by this statement? "The auditor examines and evaluates processes that produce the numbers and disclosures in the financial statements."a.
Which of the following parts of the audit is described by this statement? "The auditor examines evidence supporting the account balances and disclosures in the financial statements."a. Planning.b.
Which of the following phrases or sentences in the independent auditor's report is improperly stated?a. Those standards require that we plan and perform the audit to obtain assurance about whether
The term testing alludes to the concept ofa. A guarantee.b. A certificate.c. Accuracy.d. Sampling.
Which of the following is an incorrect statement?a. Financial statements are materially misstated when they contain misstatements whose effect, individually or in the aggregate, is impor tant enough
Which of the following is an incorrect statement?a. Detection risk is a function of the effectiveness of an auditing procedure and its application.b. Detection risk arises partly from uncertainties
Which of the following is an incorrect statement?a. Detection risk cannot be changed at the auditor's discretion.b. If individual audit risk remains the same, detection risk bears an inverse
The existence of audit risk is recognized by the statement in the independent auditor's standard report that the auditora. Obtains reasonable assurance about whether the financial statements are
The risk that an auditor will conclude, based on audit tests, that a material misstatement does not exist in an account balance when, in fact, such misstatement does exist is referred to asa.
Inherent risk and control risk differ from detection risk in that inherent risk and control risk area. Elements of audit risk while detection risk is not.b. Changed at the auditor's discretion while
Inherent risk and control risk differ from detection risk in that theya. Arise from the misapplication of auditing procedures.b. May be assessed in either quantitative or nonquantitative terms.c.
Which of the following statements is not correct about materiality?a. The concept of materiality recognizes that some matters are important for fair presentation of financial statements in conformity
The acceptable level of detection risk is inversely related to thea. Assurance provided by substantive tests.b. Risk of misapplying auditing procedures.c. Preliminary judgment about materiality
For each description, list the letter or letters of the term or terms that are identified with the description. Each term may be used once, more than once, or not at all. Description 1. This term is
This question consists of 15 items pertaining to an auditor's risk analysis of an entity. Select the best answer for each item.Bond, CPA, is considering audit risk at the financial statement level in
Evaluate the following statement:There is a 10 percent or less risk that the financial statements are misstated by more than \(\$ 3,000\).Required:a. Give the definition of materiality and audit
Audit risk and materiality should be considered when planning and performing an audit of financial statements in accordance with generally accepted auditing standards. Audit risk and materiality
Begin Company was organized in January of 19X7. The company is in the business of taking computer chips from discarded personal computers and making vases and other items that are used to decorate
Using the audit risk model, calculate detection risk if the other risks are set at these levels.a. Individual audit risk of 5 percent.Inherent risk of 50 percent.Control risk of 40 percent.b.
For the following sets of circumstances, indicate whether the auditor would have a high or low risk of failing to detect these circumstances with appropriate audit procedures. Give reasons for your
The auditor decided to examine 100 percent of the invoices supporting additions to property and equipment. Several months after the audit was completed and the audit report was issued, significant
Green, CPA, is considering audit risk at the financial statement level in planning the audit of National Federal Bank (NFB) Company's financial statements for the year ended December 31, 19X0. Audit
Assume that the audit risk model used to set detection risk contains the following percentages (from the prior-year audit) relating to the valuation assertion for net accounts receivable.Required:a.
The noise of the huge folder dropping on his desk startled Alan Weisner, a new staff member of Kosner \& Kosner. He had recently returned from the firm's staff training school."What's this?" inquired
Custom Furniture Company was ready for an audit by a new CPA firm after replacing the previous auditor who had performed the audit for several years. The lawsuit filed by Custom's creditors against
What is meant by opinion shopping?
Describe four potential duties of audit committees.
Who has the responsibility to initiate communications when a change of auditors occurs? What specific inquiries should be made?
List the matters normally included in an audit engagement letter.
Describe an auditor's attitude toward planning and performing an audit.
What matters should an auditor consider when planning an audit?
What are three global economic risks that an auditor should consider when planning an audit?
What are three U.S. economic risks that an auditor should consider when planning an audit?
What are two important industry risks that an auditor should consider when planning an audit?
What are three entity risks not controlled directly by management that an auditor should consider when planning an audit?
What are some potential problem areas that an auditor should consider when planning an audit?
When would an auditor consider the use of a specialist during the planning phase?
What are some general sources of planning information?
Why does an auditor perform analytical procedures in the planning phase of an audit?
Describe the composition of the audit team and the responsibilities of its members.
Why is an audit program considered tentative? What could cause it to be changed?
How does the auditor use the audit risk model to help plan the audit?
Why do-auditors attempt to perform as much work as possible at an interim date?
Four audit segments or phases are identified in the chapter. When is each performed?
How does planning for a first-time audit differ from planning a continuing audit?
If a CPA receives a request from an entity that is not a client to evaluate the use of an accounting principle, the CPA shoulda. Consult with the entity's auditor as required by the Code of
As generally conceived, the "audit committee" of a publicly held company should be made up ofa. Representatives of the major equity interests (bonds, preferred stock, common stock).b. The audit
Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor'sa. Opinion of any subsequent events occurring since the
A successor auditor most likely would make specific inquiries of the predecessor auditor regardinga. Specialized accounting principles of the client's industry.b. The competency of the client's
Which of the following statements would least likely appear in an auditor's engagement letter?a. Fees for our services are based on our regular per diem rates, plus travel and other out of-pocket
Because an audit in accordance with generally accepted auditing standards is influenced by the possibility of material misstatements, the auditor should plan the audit with an attitude ofa.
A CPA is planning an audit of a client, a substantial portion of whose business consists of exports of microchips for sale in England. The CPA knows from reading the financial news that the U.S.
A CPA is planning the audit of a hospital and is aware that the U.S. Congress recently passed a law limiting the amounts that can legally be charged for certain hospital services. Because of this
To obtain an understanding of a continuing client's business in planning an audit, an auditor most likely woulda. Perform tests of details of transactions and balances.b. Review prior-year working
Prior to beginning interim work on a recurring audit, an auditor makes a preliminary judgment about materiality. Which of the following would not be an appropriate base for this decision?a.
Which of the following events most likely indicates the existence of related parties?a. Borrowing a large sum of money at a variable rate of interest.b. Making a loan without scheduled terms for
An auditor obtains knowledge about a new client's business and its industry toa. Make constructive suggestions concerning improvements to the client's internal control.b. Develop an attitude of
Which of the following situations would most likely require special audit planning by the auditor?a. Some items of factory equipment do not bear identification numbers.b. Depreciation methods used on
Which of the following procedures would an auditor most likely perform in planning a financial statement audit?a. Inquiring of the client's legal counsel concerning pending litigation.b. Comparing
The objective of performing analytical procedures in planning an audit is to identify the existence ofa. Unusual transactions and events.b. Illegal acts that went undetected because of internal
In designing written audit programs, an auditor should establish specific audit objectives that relate primarily to thea. Timing of audit procedures.b. Cost-benefit of gathering evidence.c. Selected
When planning an audit, the auditor needs to evaluate audit risk where the auditor may unknowingly fail to appropriately modify his or her opinion on financial statements that are materially
Before applying substantive tests to the details of asset accounts at an interim date, an auditor should assessa. Control risk at below the maximum level.b. Inherent risk at the maximum level.c. The
Showing 1100 - 1200
of 2249
First
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Last