1) IRS, compliance audit
2) GAO, operational audit
3) CPA, operational audit
4) Internal, financial statement audit
5) GAO, operational audit
6) CPA, financial statement audit
7) GAO, financial statement audit
8) IRS, compliance audit
9) Internal, financial statement audit
10) IRS, compliance audit
11) Internal, financial statement audit
12) GAO, compliance audit
A. The conglomerate should engage to conduct the operational audit with a CPA. B. Major problems auditors likely encounter in conducting the investigation and writing the report is determining if the effectiveness and efficiency of many operations meets the created criteria determined by the auditor. Also, auditors may encounter issues with their client failing to disclose certain important information; causing misrepresentation in management’s financial statements.
1) Adequate training and proficiency; Holmes violated because he hired two accounting students to conduct audit. 2) Independence in mental attitude; Holmes violated because he didn’t conduct the audit and accepted money from the client. 3) Due Professional Care; Holmes violated because he hired those accounting students to do professional work, and he didn’t conduct the audit. 4) Proper Planning and Supervision; Holmes violated because he didn’t notice a lack in the footnotes and didn’t properly supervise/monitor the two students he hired. 5) Sufficient understanding of the entity as a whole; Holmes violated because he didn’t provide the hired students with a sufficient understanding of the clients internal control; which could affect the result of any audit. 6) Sufficient appropriate evidence; Holmes violated because no evidence was collected to aid the students to perform the audit. 7) Must state whether statements are in accordance to GAAP; Holmes violated because he didn’t refer to GAAP. 8) Must state when GAAP wasn’t being consistently observed; Holmes violated because GAAP wasn’t consistently followed. 9) Adequacy of informative disclosures; Holmes violated because he didn’t disclose any information about him accepting the bonus. 10) Expression of opinion on financial statements; Holmes violated because he didn’t independently conduct the audit, others did; creating an improper audit.
A. Present fairly in all material respects allows for small errors which would have no major impact; the alternative correctly stated guarantees absolute accuracy/no errors. B. The reference to GAAP specifies principles followed in accounting for the transactions to date; the alternative true economic conditions leaves doubt and don’t identify the specific accounting procedures applied to produce the financial statements. C. The opinion paragraph is intended to be an expression of an independent professional judgment based upon a reasonable audit of the statements and fundamental records; the alternative guarantees the accuracy and correctness of the financial statements. D. The name of the CPA firm instead of the name of the individual partner’s name should appear on the accountant's report because it is the entire firm that accepts responsibility for the report issued. E. We conducted identifies the auditor's responsibilities for conducting the audit, accumulating evidence and reporting requirements using GAAS. The alternative doesn’t reveal certain material errors or fraud, the auditor is unlikely to have responsibility for failing to do so.
A. The lawsuit shouldn’t be included in the report. Also, she didn’t have to include what she was unable to perform because alternative procedures were used to satisfy her. B. Some deficiencies in Allison’s report are that the...