Obtaining an understanding of internal control allows auditor’s to identify the types of material misstatements that could occur in the financial statements‚ consider the factors that affect the risk of material misstatements‚ and design substantive tests. An auditor obtains the understanding from researching the clients business. An auditor will take inquires from management and personnel‚ observe client activities and operations‚ walk-through the business‚ and inspect client documents and records
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Questions: Q1: Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods‚ Inc. Solution: The SEC’s influence in Smackey Dog Foods‚ Inc. can be observed in the audit standards that are being upheld. More specifically‚ the SEC developed auditor standards that must be followed. In the case of Smackey‚ we can see that the implementation of SOX has mandated that auditors be independent entities for publically held companies. Privately held companies are subject to these
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company.Balance Sheet to show the position of assets and liabilities and Statement of profit and loss to show the net result of operations over a period. Relating to Financial Statements‚ the risk that we would be concerned is of risk of material misstatement. Risk of Material Mistatement may arise due to; (i) Recording of revenue item as capital or a capital item as a revenue item. By doing so the profits for the period do not reflect at their true value. (ii) Overstating or understating of receivables/payables
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Sub Section‐ I Issues by Indian Companies in India This sub‐section attempts to cover the basic concepts and questions related to issuance of securities by unlisted Indian companies1 offering the shares to public and by listed Indian companies2. For full particulars of laws governing primary markets‚ please refer to the Acts/Regulations/Guidelines appearing in the Legal Framework Section . FAQs are presented under following 12 broad headings. 1.
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risk that: 15. Which of the following best describes the auditor’s responsibilities concerning related parties? 16. In planning the audit‚ the auditor should assess materiality at two levels: 17. Professional standards recognize that a misstatement that
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requirements and performs the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment‚ including the assessment of the risks of material misstatement of the financial statements‚ whether due to fraud or error. In making those risk assessments‚ the auditor considers internal
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Chapter 1: Auditing‚ The Integral to the Economy Public Accounting 1) audtiors provide opinions on financial statements and‚ as part of an integrated audit‚ ausitors provide opinions on internal control effectiveness a. Confidence in financial system decreases when fails 2) Unqualified audit report a. When auditor has no reservations about financial statements or internal control 3) Financial Statement Audit a. Objectively obtaining and evaluation evidence regarding economic actions and
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CHAPTER AUDIT PLANNING AND ANALYTICAL PROCEDURES THE FALL OF ENRON: DID ANYONE UNDERSTAND THEIR BUSINESS? 8 LEARNING OBJECTIVES After studying this chapter‚ you should be able to 8-1 Discuss why adequate audit planning is essential. Make client acceptance decisions and perform initial audit planning. Gain an understanding of the client’s business and industry. Assess client business risk. Perform preliminary analytical procedures. State the purposes of analytical procedures and the timing
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that the auditor’s responsibility is to express an opinion on the statements based on an audit conducted in accordance with auditing standards‚ and that the audit provides reasonable assurance that the financial statements are free of material misstatement. The
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Case #1 [Type the document subtitle] 2/16/2014 Review Comments Summary Discussion Questions – 2 Hours Exercise – 1.5 Hours Table of Contents Title Page……………………………………………………………..………………………….. Review Comments…….……………………………………………………………………........1 Team Summary …………………………………………………………………………………..2 Table of Contents……………………………………………………………………………..….3 Discussion Questions……………………………………………………………………………...4 Question #1………………………………………………………………………………
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