activities is an analytical procedure an auditor would perform in the final overall review stage of an audit to ensure that the financial statements are free from material misstatement? A. Reading the minutes of the board of directors’ meetings for the year under audit. B. Obtaining a letter concerning potential liabilities from the client’s attorney. C. Comparing the current year’s financial statements with those of the prior year. D. Ensuring that a representation letter signed by management
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Audit Planning: Assessment of Control Risk MULTIPLE CHOICE: 1. Which of the following is ordinarily considered a test of internal control procedures? a. Send confirmation letters to banks. b. Count and list cash on hand. c. Examine signatures on checks. d. Obtain or prepare reconciliations of bank accounts as of the balance sheet date. ANSWER: C 2
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* Subject Synopsis This course introduces the elements of auditing. It discusses the principles and procedures of auditing‚ types of audits‚ scope and objectives of auditing. It also covers professional ethics in auditing‚ audit evidences‚ audit planning and various other aspects of auditing. Moreover it gives knowledge about objectives of doing audit. The course also aims to explain the liability and responsibility of the auditor and how the computerised environment effects the business environment
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execution of the strategy at various stages First you have to decide how you are going to tackle the audit. That’s the big picture. It could be that you decide there are no good internal controls. Your strategy would then be to not do any TOCs and concentrate on substantive procedures. Having decided that then you have to plan how you will use substantive procedures to get sufficient appropriate audit evidence. If your strategy is not to do any tests of control‚ then the detailed plan will take that
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AUDIT EXPECTATIONS GAP Definition i) Liggio (1974a) defines it as the difference between the levels of expected performance as envisioned by the independent accountant and by the user of financial statements. The Cohen Commission (1978) on auditors’ responsibility extended this definition by considering whether a gap may exist between what the public expects or needs and what auditors can and should reasonably expect to accomplish. ii) According to Guy and Sullivan (1988)‚ there is a
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an upward trend over the years. The problem is expected to continue to increase‚ due in part to growing financial markets and the lingering recession. The auditor’s responsibility to detect corporate fraud has also been on a general upward trend over the years. Especially since the Enron scandal‚ auditors are now required to be more proactive in searching for fraud when performing an audit. This responsibility is defined in International Standards on Auditing and enforced through legislation in
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Audit Proposal—Kudler Fine Foods Previously Kudler Fine Foods had asked accounting firm 123 Accounting for their recommendation on a system which would improve automation in their business processes. Accounting firm 123 Accounting provided Kudler with a recommended course of action to take towards automating their accounting information system‚ as well as provided a flowchart to assist in describing the process by which the software will help management consolidate their financial data. Currently
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internal controls and the audit process. Answer The purpose of an audit is to provide financial statement users with an opinion by the auditor on whether the financial statements are presented fairly‚ in all material respects‚ in accordance with the applicable financial reporting framework. An audit also enhances the degree of confidence of intended users in the financial statements. Financial audits add credibility to the implied assertion by the management that the financial statements fairly represent
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ON THE IMPORTANCE OF HR AUDIT TO INCREASE THE PRODUCTIVITY OF AN ORGANIZATION’S FUNCTIONS INTRODUCTION OF THE STUDY: The concept of HR audit has emerged from the practice of yearly finance and accounting audit‚ which is mandatory for every company‚ to be done by external statutory auditors. This audit serves as an examination on a sample basis of practices and systems for identifying problems and ensuring that sound accounting principles are followed. Similarly‚ an HR audit serves as a means through
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to client (Better Production & Co) 2. Liability to third party who use the information (Usahasama City Bank) 3. Liability to the foreseen user (who rely on the auditor’s financial statement) b) No. Aiman & Co can not be held liable to Usahasama & Co. The only action available for financial loss caused by a false financial statement was in the tort of deceit. In order to succeed‚ the claimant (Usahasama) had to prove that Aiman & Co had acted dishonestly. It was not enough to show that the loss
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