case 1

Topics: Enron, Audit, Internal control Pages: 3 (774 words) Published: November 23, 2013
Brham S. InocencioBSA IV-A
CASE 01 – Enron Corporation
1. List three types of consulting services that audit firms have provided to their audit clients in recent years. For each item, indicate the specific threats, if any, that the provision of the given service can pose for an audit firm’s independence. In the recent years, auditing firms provides the following consulting services to their clients: a. Internal auditing

b. Design of accounting systems
c. Various types of Information Technology (IT) services
2. Briefly describe the key requirements included in the professional auditing standards regarding the preparation and retention of audit workpapers. Which party “owns” audit workpapers: the client or the audit firm? Workpapers is the connecting link between the client’s accounting records and auditor’s report. Rule 501 – Acts Discreditable of the AICPA Code of Professional Conduct explains the ethical requirements related to auditor’s working papers and client records. The preparation of workpapers depends on several factors, such as nature of auditing procedure being performed, the risk of misstatement involved of the area being tested, the significance of the evidence to overall audit, the extent of judgment involved in performing the work, and the nature of the findings or results. The professional standards require a period of not less than 5 years while the Sarbanes-Oxley Act of 2002 requires that the auditors maintain documentation for 7 years. Thus for public clients, auditors must retain working papers for 7 years, but they may destroy them after 5 years if the client is nonpublic company. Audit workpapers are owned or property of the audit firm, not the client. At no time does the client have the right to demand access to the auditors’ working papers. After the audit, the working papers are retained by the auditors. 3. Identify and list five recommendations that have been made recently to strengthen the independent audit function. For each of...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Just for Feet Audit Case 5-7 Essay
  • benetton images 1 Essay
  • APUSH Chapter 1 Cornell Notes Essay
  • MKT 571 Quizzes week 1 6 Essay
  • Essay on Case Assignment 1
  • Ms Consultancy Case Study Essay
  • Cold Case Investigation Essay
  • Case Management Essay

Become a StudyMode Member

Sign Up - It's Free