This assignment requires brief explanat
This assignment requires brief explanations. Save the fluff for another time.
Auditing Insight p. 91-Things add up at HealthSoouth
EY’s audit plan for HealthSouth included a materiality level of $5,000 for all expenses.
1. Briefly explain why this was or was not appropriate, assuming there was no fraud?
2. What audit procedure(s) could have detected the fraud?
3. Why is fraud always material, no matter the amount?
Auditing Insight p. 97-Interviewing.
Some audit procedures require interviewing client personnel.
4. What concerns you about interviewing?
5. Are you prepared for this auditor responsibility? Briefly explain.
6. What course or topics do you think will help prepare you or better prepare you?
Auditing Insight p. 150-151-A Suitcase Full of Money
Companies in the Insight were fined for bribery but pleaded guilty to failing to maintain proper internal and keeping adequate records (FCPA.).
14. How are failing to maintain proper internal controls and records and bribery connected? Or are they? Briefly explain.
For p. 91 2nd question
Audit Procedures
Audit Procedures specifically refer to the methods or techniques used by auditors in the conduct of the examination to gather evidence. There are eight categories of procedures that are typically used by auditors. They are listed below with examples:
(1a) Document inspection (vouching)
Find brokers’ invoices and canceled checks showing agreement with record amounts for securities investments.
(1b) Document inspection (tracing)
Select a sample of shipping documents and trace them to sales invoices, sales journal recording, and posting to general ledger.
(1c) Document inspection (scanning)
Scan expense accounts for credit entries.
Scan payroll check lists for unusually large checks.
(2) Inspection of tangible assets
Verify existence of fixed assets by locating them.
(3) Observation
Observe test counting of client’s physical inventory taking.
(4) Confirmation
Obtain accounts receivable
Auditing Insight p. 91-Things add up at HealthSoouth
EY’s audit plan for HealthSouth included a materiality level of $5,000 for all expenses.
1. Briefly explain why this was or was not appropriate, assuming there was no fraud?
2. What audit procedure(s) could have detected the fraud?
3. Why is fraud always material, no matter the amount?
Auditing Insight p. 97-Interviewing.
Some audit procedures require interviewing client personnel.
4. What concerns you about interviewing?
5. Are you prepared for this auditor responsibility? Briefly explain.
6. What course or topics do you think will help prepare you or better prepare you?
Auditing Insight p. 150-151-A Suitcase Full of Money
Companies in the Insight were fined for bribery but pleaded guilty to failing to maintain proper internal and keeping adequate records (FCPA.).
14. How are failing to maintain proper internal controls and records and bribery connected? Or are they? Briefly explain.
For p. 91 2nd question
Audit Procedures
Audit Procedures specifically refer to the methods or techniques used by auditors in the conduct of the examination to gather evidence. There are eight categories of procedures that are typically used by auditors. They are listed below with examples:
(1a) Document inspection (vouching)
Find brokers’ invoices and canceled checks showing agreement with record amounts for securities investments.
(1b) Document inspection (tracing)
Select a sample of shipping documents and trace them to sales invoices, sales journal recording, and posting to general ledger.
(1c) Document inspection (scanning)
Scan expense accounts for credit entries.
Scan payroll check lists for unusually large checks.
(2) Inspection of tangible assets
Verify existence of fixed assets by locating them.
(3) Observation
Observe test counting of client’s physical inventory taking.
(4) Confirmation
Obtain accounts receivable