Question

Base your answers only on the auditing standard specified for each question. No credit will be given for answers that lack the correct reference including the paragraph numbers 1. Which Statements on Auditing Standards (SASs) serve as the source for the standard AU-C 530, on audit sampling for audits of nonissuers? 2. What is the source, title, and effective date of AU-C $705? 3. According to the PCAOB Auditing Standard AS 2105, when an audit involves consolidated financial statements of a company with multiple locations or business units, what should the auditor consider with respect to tolerable misstatement for the individual locations? 4. According to AU-C 330, what should the auditor do if the auditor intends to rely on the controls the auditor tested during the interim period?

Answer 1

1. Ans SAS No. 122 is the source for the Standard AU-C 530 on Audit Sampling.

2. Ans SAS No. 122 and 123, Title: Modifications to the Opinion in the Independent Auditor’s Report. Its effecrtive from Dec 15, 2012.

3. Ans. For the purposes of the audit of the consolidated financial statements of a company with multiple locations or business units the auditor should consider that tolerable misstatement is lower for an/any (each) individual location than the than the materiality level for the financial statements as a whole. (Para 10)

4. Ans. If the auditor intends to rely on the controls tested during the interim period then he needs to perform, further substantive procedures only and has no need for testing the controls, for the intervening period. Para 23 Read with A 60