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Finance Problems




Question;Question 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#38469 | Written in 18-Jul-2015

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