• Materiality

Discuss what materiality is for the auditor and how it is used in the audit process and Why has the SEC been concerned about materiality?

• Control environment

One of the elements of an organization's control system is the "control environment." Identify at least four factors that the auditor should consider when reviewing the control environment and discuss how the auditor would relate this review to the assessment of control risk.

• Use of audit tools

Jen Staples, is an auditor at King and Sheets, LLP. King and Sheets is engaged to perform an audit of the First national Bank of the Everglades which has very complex systems and technology in place related to its financial accounting and operations. Jen has information systems skills and experience in performing audits in such an environment. Discuss how Jen might use audit tools to perform procedures of FNB of the Everglades.

• Fraud consideration by auditors

John Beasley is interviewing with public accounting firms to become an auditor. John does not believe that fraud is a "big deal" in client organizations and argues that most individuals in management of companies are "honest people". He believes that auditors are becoming too cynical.

Describe your response to John's attitude and discuss the major types of fraud that occur in companies.

• Planning and documentation of sampling use

When sampling is used in audit procedures, what should be included working papers to provide adequate documentation?