Question

In the normal course of performing their responsibilities, auditors often conduct audits or reviews of the items listed below. Requirements a. For the 12 examples, state the most likely type of auditor (CPA, GAO, IRS, or internal to perform each. b. In each example, state the type of audit (financial statement audit, operational audit, or compliance audit). (450) coa) ca Start with example 1. through 5. and (a) identify the most likely type of auditor (CPA, GAO, IRS, or internal) to perform each, and (b) identify the type of audit (financial statement audit, operational audit, or compliance audit). Most likely type of auditor Type of audit The computer operations of a large corporation to evaluate whether the internal controls are likely to prevent misstatements in 1. accounting and operating data. Financial statements for use by stockholders when there is an 2. Internal audit staff. A bond indenture agreement to make sure a company is following 3. all requirements of the contract. 115 Internal controls at a casino to ensure the casino is in compliance 4. with federal and state regulations. 118) Computer operations of a corporation to evaluate whether the 5. computer center is being operated as efficiently as possible. Complete the table to (a) identify the most likely type of auditor (CPA, GAO, IRS, or internal) to perform each, and (b) identify the type of audit (financial statement audit, operational audit, or compliance audit) for examples 6. through 9. Most likely type of auditor Type of audit 6. Annual statements for the use of management Operations of the IRS to determine whether the internal revenue agents 7. are using their time efficiently in conducting audits. 163) Statements for bankers and other creditors when the client is too small 8. to have an audit staff. [16 Financial statements of a branch of the federal government to make sure that the statements present fairly the actual disbursements made during 9. a period of time. KB Complete the table to (a) identify the most likely type of auditor (CPA, GAO, IRS, or internal) to perform each, and (b) identify the type of audit (financial statement audit, operational audit, or compliance audit) for examples 10. through 12. Most likely type of auditor Type of audit Disbursements of a branch of the federal government for a special research project to determine whether the expenditures were consistent 10. with the legislative bill that authorized the project. 109 Federal income tax returns of an officer of a private corporation to determine whether he or she has included all taxable income in his or 11. her return. 162 Federal income tax returns of a corporation to determine whether the tax 12. laws have been followed.

Answer 1

Q 1:

The most likely type of auditor and the type of audit for each of the examples are:

EXAMPLE	TYPE OF AUDITOR	TYPE OF AUDIT
1.	Internal auditor or CPA	Financial statements or operational
2.	CPA	Financial statements
3	Internal auditor or CPA	Compliance
4
5	Internal Auditor or CPA	Operational
6	CPA or Internal auditor	Financial statements
7	GAO	Operational
8	CPA	Financial statements
9	GAO	Financial statements
10	GAO	Compliance
11	IRS	Compliance
12	IRS	Compliance

Q 3:

a.         The relationship among audit services, attestation services and assurance services is reflected.

Audit services are a form of attestation service, and attestation services are a form of assurance service. In a diagram, audit services are located within the attestation service area, and attestation services are located within the assurance service area.

b. 1.     (2) An attestation service other than an audit service

3.     (1) An audit of historical financial statements

5. (2) An attestation service other than an audit service 7.     (2) An attestation service that is not an audit service (Review services are a form of attestation, but are performed according to Statements on Standards for Accounting and Review Services.)

9. (2) An attestation service other than an audit service

10. (2) An attestation service other than an audit service 11. (3) An assurance service that is not an attestation service.