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ACC Auditing Questions

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Question;Question 1.1. (TCO A) What is the relationship between U. S. AND International AuditingStandards?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 buthe would like to expand on the rationale for the unqualified opinion. Please describe the fivesituations 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 Kents actions impairhis independence. Explain your response for each situation:Kents friend, an employee of another local accounting firm, prepares Forts Tax return.Kents 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 nowyou have just completed your first year in your own CPA firm. Your Physician audit client, whomyou just issued an Unqualified Opinion, has just determined that his accountant has beenstealing about $300,000 per year from their Physician Medical Practice which you failed todetect during your audit. You had warned the Managing Partner that they did not haveadequate 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 Controlswithin a publicly held company are to be reviewed, evaluated and tested at year end to insurethat adequate controls are in place. Explain and describe two of the three major methods toobtain and document their understanding of a companys controls.Question 1.1. (TCO E) What is COSO? Describe the 5 elements of COSOs Internal ControlIntegrated Framework. Provide an example of each of those components and explain why theyare important in providing Reliable Financial Reporting for a company. Please provide acomplete answer for full points.Question 2.2. (TCO G) Conducting an audit in accordance with Generally Accepted AuditingStandards requires that the audit is properly planned, performing preliminary upfront analyticalprocedures, assessing the clients business risk and making sure that the auditors understandthe clients business and industry.(a) Identify and describe at least three aspects of proper audit planning and why they areimportant.(b) Define what an analytical procedure is and give at least three procedures that should beperformed and their purpose. For example, comparison of last years Allowance for DoubtfulAccounts to this years 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 atAccounts Receivables and the related Allowance for Doubtful Accounts? Would you increaseor decrease your audit procedures?(c) Why does an auditor need to understand the clients business and their industry? Providean 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 byinternal 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 inherentrisk?(4) The Inherent risk of the theft of an inventory of cellphones at a mall store is greater than themisappropriation of cash at a COSTCO Store?Question 4.4. (TCO I) Accounts Receivable - For each of the following, please explain if anauditors review of the clients sales cutoff would detect these problems:(a) Would excessive goods returned for credit be detected by a sales cut-off test why or whynot?(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 whynot?(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 incompatiblefunctions may be performed by the same individual. Identify from the below choices the controlcompensating for inadequate segregation of duties in a computer system. Explain why youhave selected your response.(a) Echo Checks(b) A check digit system(c) Computer-Generated hash totals(d) A computer access logQuestion 6.6. (TCO K) You are the Senior Auditor for WWZ Co. and you have completed thetesting of all the accounts. However, prior to issuing your report, what are at least five otherprocedures or reviews that must be performed prior to issuing your report? Explain yourresponses

 

Paper#38590 | Written in 18-Jul-2015

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