(Q) Explain why the audit of sales and receivables may present auditors with significant audit risk
(ans) The audit of revenue and receivables is of significant audit risk because :-
Most of the risks involving receivables and revenue include inherent risks and fraud risks.Examples are:
11-2. Explain why the audit of revenue and receivables may present the auditors with significant audit...
What consulting or nondash audit services are prohibited for auditors of public companies? Explain why it is generally agreed that prohibitions on consulting and non-audit services will improve auditors' professional judgment and professional skepticism. What consulting or nondash audit services are prohibited for auditors of public companies? (Select all that apply.) 1. Tax services to audit clients 2. Legal and expert services unrelated to the audit 3. Security of electronic information 4. Test the effectiveness of internal control over financial...
4) The auditors may decide to confirm accounts payable on an audit engagement. a. Describe two reasons why the confirmation of accounts payable is not a presumptively mandatory auditing procedure. b. Describe the audit circumstances in which the auditors are likely to decide to confirm accounts payable. c. Describe the types of accounts payable the auditors are likely to select for confirmation.
Explain how internal control work done by auditors impacts the audit risk equation. Does control risk change if the auditors are providing an opinion over internal controls? How is detection risk impacted?
Explain how internal control work done by auditors impacts the audit risk equation. Does control risk change if the auditors are providing an opinion over internal controls? How is detection risk impacted?
A) Auditors often must request information from the client while completing various audit tasks. What are some of the issues that the auditors may encounter when requesting evidence from clients and how should they deal with those issues? B) What is the difference between inherent risk and control risk? Why is it important that auditors not assume that a certain level of control risk exists when assessing inherent risk? C) What were some of the risk factors that may impact...
Discussion Topic: When performing an audit, auditors are especially concerned about engagement risk. For this reason, they perform main activities to reduce engagement risks. Further, the auditing standards require auditors to understand the client's business, and its environments, and its internal controls when planning the audit so that they could better plan the nature, timing, and extent of the audit. Required: 1. Discuss why the auditor would be concerned about engagement risk and identify two or more activities the auditors...
REMOVEDAuditors have a responsibility to remain alert to audit evidence that contradicts other audit evidence obtained. The application of professional skepticism is essential to the critical assessment and questioning of contradictory audit evidence. When the auditor obtains information during the course of the audit that contradicts information obtained from another source, the auditor has a responsibility to resolve the matter and consider its impact on the sufficiency and appropriateness of audit evidence obtained and the effect, if any, on other...
Which of the six risks should be considered a significant risk? Explain why they represent a significant risk. For each risk that you identified as a significant risk, describe how you might address the risk to give it special audit consideration. For example, a valuation risk might be addressed by engaging a valuation specialist. Begin by determining which of the six risks should be considered a significant risk. Then, for each risk that has been identified as a significant risk,...
When producing an audit report, auditors may face different circumstances which may mean a True and Fair audit opinion is not appropriate. Required: Explain the potential effect on the final audit report of each of the following scenarios: (for outlining the effect on report and rationale. Three or four marks for each of the three scenarios to maximum of ten.) Audit tests on purchases indicate a weakness in the internal control system, with a potential overstatement of cost of sales...
Incorporating elements of unpredictability in the selection of audit procedures to be performed by auditors is important. Explain why.