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discussion 4-7




Answer each question, please be advised that the answers will be turned into;Discussion 4;1.According to an article in the CPA Journal, the auditor considers reliability of audit evidence collected and the reliability of that evidence to reduce the risk of financial statements containing undetected material errors. Compare and contrast at least two (2) types of evidence, and make a recommendation as to which you believe is the most reliable in reducing risk. Support your position.;1b.From the e-Activity, analyze the primary ways in which auditors would use the information from downgrades to assess business risk or evaluate the likelihood that the downgrades would impact the auditor's assessment of the client's business environment. Ascertain the major ways in which this information would impact the audit risk model equation. Support your position.;Discussion 5;1a.According to the text, auditors have to make judgments concerning materiality on every audit. Since the auditing standards give no formal guidance for how to determine materiality, auditors must rely on their own experience. Determine at least three (3) qualitative factors that affect the auditor's judgment. Provide a rationale for your response.;1b.According to the text, auditors rely on the audit risk formula to determine the types and amount of audit evidence to collect in order to keep the overall audit risk of engagements to a minimum or below defined tolerable limits. Suggest an alternative to the audit risk equation in order to mitigate audit risk. Support your rationale with examples of the successful use of the alternative strategy.;Discussion 6;1a.Create a scenario where external auditors determined that a company's internal controls were deficient, but such a deficiency might not mean that a material weakness existed. Ascertain the impact on the audit plan if additional deficiencies are discovered on other related internal controls. Support your position.;1b.From the e-Activity, identify the accounts that the fraud had affected, and analyze the auditor?s responsibility to detect fraud. Suggest key internal controls that would have either prevented or detected the fraudulent behavior or transactions. Justify your response.;Discussion 7;1a.Create a scenario in which a company conceals financial fraud from the auditing firm through the use of information technology, and suggest at least one (1) way in which an auditing firm can minimize its exposure to this risk.;1b.According to the text, planning an audit involves establishing the overall audit strategy for the engagement and developing an audit plan in an attempt to reduce audit risk to an acceptable level. Select a balance sheet account or income statement account, and discuss the type of audit procedure that would produce the most reliable evidence for that account balance. Defend your position.


Paper#76101 | Written in 18-Jul-2015

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