Consider AICPA guidance. Why should an auditor perform risk assessment procedures? Also, what are three risk assessment...
- Consider AICPA guidance. Why should an auditor perform risk assessment procedures? Also, what are three risk assessment procedures an auditor should undertake in order to assess an entity's risks of material misstatement in an audit?
- Consider AICPA guidance. Can analytical procedures be used as a form of substantive testing? Citing from the applicable AU-C, justify your response.
- Locate the PCAOB's audit standard on performing integrated audits. When an auditor is reporting on the results of an audit, must the auditor issue separate or combined reports on the company's financial statements and internal controls?
- Locate a PCAOB Staff Audit Practice Alert. Briefly, summarize the main issue addressed in this particular alert. Next, describe the role you think these alerts plan in establishing auditing requirements for registered public accounting firms.
Homework Answers
1) Risk assessment procedures are respond the material misstatement in records and financial statements.
Risk assessment procedures are : Test of Control, Substantive Procedures and Analytical Procedures.
2) Yes, they are almost same but what matters is when they are performed. Substantive includes actual documents verification and analytical also includes that. However, it also includes the analysis using various formulas to identify loopholes and variances.
3) AS 2201. Yes, separate report shall be issued.
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Consider AICPA guidance. Why should an auditor perform risk assessment procedures? Also, what are three risk assessment...
1.Which of the following is not one of the steps the auditor must perform to assess...
1.Which of the following is not one of the steps the auditor must perform to assess control risk at less than “high” for a financial statement assertion? A) obtain an understanding of internal control B) identify controls that address all relevant assertions in the financial statements C) make a preliminary assessment of control risk based on the design of relevant controls D) test the operating effectiveness of the controls that must be effective to reduce control risk 2.Which of the...
D’Aquila, J., K. Capriotti, R. Boylan, and R. O’Keefe. 2010. Guidance on auditing high-risk clients. CPA...
D’Aquila, J., K. Capriotti, R. Boylan, and R. O’Keefe. 2010. Guidance on auditing high-risk clients. CPA Journal (October): 32-37 What are main factors that influence engagement risk? Why should an auditor perform risk assessment procedures? How does an auditor identify significant risks of material misstatement? According to the article, what are the most important strategies firms should use to mitigate risk? Eilifsen, A. and W. F. Messier, Jr. 2015. Materiality guidance of the major public accounting firms. Auditing: A Journal...
These are more choices to choose from. John Josephs, an audit manager for Tip, Acanoe &...
These are more choices to
choose from.
John Josephs, an audit manager for Tip, Acanoe & Tylerto, was asked to speak at a dinner meeting of the local Small Business Administration Association. The president of the association has suggested that he talk about the various phases of the audit process to help small business owners better understand what auditors do. John has asked you, his trusted assistant, to prepare an outline for his speech. He suggests that you answer the...
Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee
1. Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee? A. Management's failure to renegotiate unfavorable long-term purchase commitments.B. Recurring operating losses that may indicate going concern problems.C. Evidence of a lack of objectivity by those responsible for accounting decisions.D. Management's current plans to reduce its ownership equity in the entity. 2. After obtaining an understanding of internal control and arriving at a preliminary assessed level...
Review the Audit report (found in the 10-K) for the following two companies. Highlight or summarize...
Review the Audit report (found in the 10-K) for the following
two companies. Highlight or summarize
differences between the reports (other than the name of Company,
Audit Firm, Financial statement
period covered).
Note:
1. Each Company may have two audit reports (one opinion on
financial statements and one for
audit of internal controls) or the two opinions may be combined
into one report.
2. You are not required to review the entire 10-K. Find the
audit report in the 10-K...
LO 10-6, 10 10-36 Based on an assessment of audit risk, the auditors are concerned with...
LO 10-6, 10 10-36 Based on an assessment of audit risk, the auditors are concerned with the following two risks: 1. The risk that that the client might be making duplicate payments to vendors. 2. The risk that the client's accounting clerk might be making unauthorized payments to himself. a. Assuming that the client has a manual accounting system, describe how the auditors can design a test to identify the duplicate payments and unauthorized payments. b. Assuming that the client...
These are more choices to
choose from.
John Josephs, an audit manager for Tip, Acanoe & Tylerto, was asked to speak at a dinner meeting of the local Small Business Administration Association. The president of the association has suggested that he talk about the various phases of the audit process to help small business owners better understand what auditors do. John has asked you, his trusted assistant, to prepare an outline for his speech. He suggests that you answer the...
Review the Audit report (found in the 10-K) for the following
two companies. Highlight or summarize
differences between the reports (other than the name of Company,
Audit Firm, Financial statement
period covered).
Note:
1. Each Company may have two audit reports (one opinion on
financial statements and one for
audit of internal controls) or the two opinions may be combined
into one report.
2. You are not required to review the entire 10-K. Find the
audit report in the 10-K...
LO 10-6, 10 10-36 Based on an assessment of audit risk, the auditors are concerned with the following two risks: 1. The risk that that the client might be making duplicate payments to vendors. 2. The risk that the client's accounting clerk might be making unauthorized payments to himself. a. Assuming that the client has a manual accounting system, describe how the auditors can design a test to identify the duplicate payments and unauthorized payments. b. Assuming that the client...
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