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External Audit -(TCO A) What is the relationship between U. S. AND International Auditing Standards?

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Question;11 question on the external audit the reference for the answer is the book (AUDITING AND ASSURANCE SERVICES AN INTEGRATED APPROACH, 14 TH EDITION FOR ALVIN A. ARENS, RANDAL J.EILDER, MARK S.BEASLEYQuestion 1.1. (TCO A) What is the relationship;between U. S. AND International Auditing Standards?;Question 2.2. (TCO B) Alan, a CPA is;participating in an audit engagement of ABC Company. He has performed the audit;and has determined that an unqualified opinion is to be issued but he would;like to expand on the rationale for the unqualified opinion. Please describe;the five situations in which an explanatory paragraph would be necessary in an;unqualified opinion.;Question 3.3. (TCO C) Kent, CPA is a staff;auditor participating in the audit engagement of Fort, Inc. Based upon each of the circumstances below;indicate whether or not Kent?s actions impair his independence. Explain your response for each situation;?????????Kent?s friend, an employee of;another local accounting firm, prepares Fort?s Tax return.;?????????Kent?s sibling is the director of;Internal Auditing for Fort, Inc..;Question 4.4. (TCO D) You are a CPA, you worked 2 years for a CPA;firm doing audits and now you have just completed your first year in your own;CPA firm. Your Physician audit client, whom you just issued an Unqualified;Opinion, has just determined that his accountant has been stealing about;$300,000 per year from their Physician Medical Practice which you failed to;detect during your audit. You had warned;the Managing Partner that they did not have adequate Internal controls ? are;you liable? Explain your defense and;possible legal liability.;Question 5.5. (TCO F) Sarbanes Oxley requires that per Section 404;that Internal Controls within a publicly held company are to be reviewed;evaluated and tested at year end to insure that adequate controls are in place.;Explain and describe two of the three major methods to obtain and document;their understanding of a company?s controls.;Question 1.1. (TCO E) What is COSO? Describe the 5 elements of COSO?s Internal;Control-Integrated Framework. Provide an;example of each of those components and explain why they are important in;providing ?Reliable Financial Reporting? for a company. Please provide a complete answer for full;points.;Question 2.2. (TCO G) Conducting an audit in;accordance with Generally Accepted Auditing Standards requires that the audit;is properly planned, performing preliminary upfront analytical procedures;assessing the clients business risk and making sure that the auditors;understand the client?s business and industry.;(a);Identify and describe at least three aspects of proper audit planning;and why they are important.;(b) Define what an analytical procedure is;and give at least three procedures that;should be performed and their purpose.;For example, comparison of last year?s Allowance for Doubtful Accounts;to this year?s Allowance for Doubtful accounts ? the amount has decreased by;25%, while sales have increased by 10% from last year. How might this affect how you look at;Accounts Receivables and the related Allowance for Doubtful Accounts? Would you increase or decrease your audit;procedures?;(c) Why does an auditor need to understand;the client?s business and their industry?;Provide an industry and what risks may that industry pose to our client.;Question 3.3. (TCO H) Audit Risk consists of;inherent risk, control risk, and detection risk.;(a) Please completely define each of the;above.;(b) Indicate whether each of the statements;below is true or false and explain your position;(1);The risk that material misstatement will not be prevented or detected on;a timely basis by internal controls can be reduced to zero by having effective;controls in place.;(2);Detection Risk is a function of the efficiency of an auditing procedure.;(3) Cash is more susceptible to theft than;an inventory of coal because it has greater inherent risk?;(4);The Inherent risk of the theft of an inventory of cellphones at a mall;store is greater than the misappropriation of cash at a COSTCO Store?;Question 4.4. (TCO I) Accounts Receivable;- For each of the following, please explain if an auditor?s review of the;client?s sales cutoff would detect these problems;(a) Would excessive goods returned for;credit be detected by a sales cut-off test ? why or why not?;(b) Would unrecorded sales discounts be;detected by a sales cut-off test ? why or why not?;(c) Lapping of year-end accounts receivable;be detected by a sales cut-off test ? why or why not?;(d) Inflated sales for the year ? could it;be detected by a sales-cut-off test ? why or why not?;Question 5.5. (TCO J) One of the major problems;in a computer system is that incompatible functions may be performed by the;same individual. Identify from the below;choices the control compensating for inadequate segregation of duties in a computer;system. Explain why you have selected;your response.;(a) Echo Checks;(b) A check digit system;(c) Computer-Generated hash;totals;(d) A computer access log;Question 6.6. (TCO K) You are the Senior;Auditor for WWZ Co. and you have completed the testing of all the;accounts. However, prior to issuing your;report, what are at least five other procedures or reviews that must be performed prior to;issuing your report? Explain your;responses

 

Paper#37723 | Written in 18-Jul-2015

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