Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(15 marks) 4. .Audit Evidence External Confirmations. In reference to The Financial Times article, After Wirecard: is it time to audit the auditors? Jonathan Ford

(15 marks) 4. .Audit Evidence External Confirmations. In reference to The Financial Times article, After Wirecard: is it time to audit the auditors? Jonathan Ford & Tabby Kinder July 3 2020.

Audit Evidence External Confirmations

Quotes regarding Parmalat

A routine bank reconciliation revealed that 3.9BN Euros of cash which Parmalat was supposed to exist at the Bank of America did not actually exist.

Yet it rested on the an apparently simple deception: the reconciliation letter on which the auditors were relying had been forged. (Parmalat)

It remains unclear exactly how the crucial confirmation slipped through the cracks. (Parmalat)

General quotes - Wirecard

According to one EY partner: The general view internally is that confirming historic cash balances is auditing 101, and [that] ordinary auditing processes were followed, including third party verification, in which case the fraud was sophisticated in its use of false documents.

The integrity of the cash account [which records cash and should reconcile to all the other items in the accounts] is totally central to the whole system of double-entry bookkeeping, says Karthik Ramanna, professor of business and public policy at Oxfords Blavatnik School of Government. If there is no integrity to the cash account, then the whole system is just a joke.

In addition to the article, use our course resources on Wirecard, course textbook (5.2.2), CAS 505 and CAS 500.

  1. Discuss the general concept of external confirmations.
  2. Discuss and interpret either the Parmalat quotes or the general quotes Wirecard.
  3. Refer to CAS 500 Audit evidence and describe sufficient appropriate audit evidence and three (3) methods to obtain it.
  4. In regard to Wirecard, do you feel the auditors did a quality audit in the area of external confirmations and sufficient audit evidence?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

IT Auditing Using Controls To Protect Information Assets

Authors: Chris Davis, Mike Schiller, Kevin Wheeler

3rd Edition

1260453227, 978-1260453225

More Books

Students also viewed these Accounting questions

Question

Demonstrate competence and consistency in professional behavior.

Answered: 1 week ago

Question

Are your goals SMART?

Answered: 1 week ago