Part 1

Angela Walsh is a new staff auditor. On her first three engagements, she was assigned to perform tests of controls for acquisitions and payments and test of details of balances for accounts payable. The approach taken in each audit is briefly described below:

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Part 1

Angela is confused by the apparent inconsistency in the audit approach on the three audits, and concludes that the audit approach and amount of audit evidence to collect depends on the audit partner in charge of the engagement.

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Part 1

Requirement a. Match each engagement with the following descriptions:Match each engagement with one of the following descriptions:

(1) Extensive reliance on controls was planned for this audit engagement, but control risk was increased after tests of controls.

(2) This audit is likely for a public company, and is also the most efficient audit.

(3) This company has ineffective controls, and may also have fraud risks present.

b.

What other factors likely explain the different approaches to the audit of acquisitions and payments and accounts payable for these three engagements?

c.

What could Angela's supervisors have done to improve her understanding of the audit strategy for each engagement?