Example Auditing Case
Example auditing case
1)” Based on the information given in this case and your knowledge of auditor’s reports, identify the deficiencies in the draft of the proposed report. Do not redraft the report, but provide justification or explanation for each of the deficiencies you identify” (Pany, Auditor's Report, 2010).
A. In the Introduction paragraph it states “As discussed in Note K to the financial statements, the Company has properly disclosed a subsequent event dated March 14, 20x9” (Pany, Auditor's Report, 2010). This does not belong in this section of the report; it belongs below the scope paragraph. The introduction paragraph is to “clarify the responsibilities of management and the auditors” (Pany, Professional Standards, 2010).
B. In the opinion paragraph it states, “except for the matters discussed in the first and the final paragraphs of this report” (Pany, Auditor's Report, 2010). In the auditor report they do not refer back to the exception of the report. The opinion paragraph is to consist of only one sentence which is a restatement from previous paragraphs and includes the opinion of the auditors.
C. In the opinion paragraph it states, “the financial statements referred to above present fairly in all material respects” (Pany, Auditor's Report, 2010). Since this audit was concluded to have an adverse opinion, the report should not state fairly presented, but not fairly presented. The use of presented fairly refers to an unqualified opinion.
D. In the opinion paragraph it states, “applied on a basis consistent with that of the proceeding year” (Pany, Auditor's Report, 2010). To me this is just excessive words to make the report longer. We are not auditing 20x7 financial statements but 20x8 financial statements so there is no need to refer back to that year. The opinion paragraph is to consist of only one sentence which is a restatement from previous paragraphs and includes the opinion of the auditors.
E. At the bottom of this report it states, “As
1)” Based on the information given in this case and your knowledge of auditor’s reports, identify the deficiencies in the draft of the proposed report. Do not redraft the report, but provide justification or explanation for each of the deficiencies you identify” (Pany, Auditor's Report, 2010).
A. In the Introduction paragraph it states “As discussed in Note K to the financial statements, the Company has properly disclosed a subsequent event dated March 14, 20x9” (Pany, Auditor's Report, 2010). This does not belong in this section of the report; it belongs below the scope paragraph. The introduction paragraph is to “clarify the responsibilities of management and the auditors” (Pany, Professional Standards, 2010).
B. In the opinion paragraph it states, “except for the matters discussed in the first and the final paragraphs of this report” (Pany, Auditor's Report, 2010). In the auditor report they do not refer back to the exception of the report. The opinion paragraph is to consist of only one sentence which is a restatement from previous paragraphs and includes the opinion of the auditors.
C. In the opinion paragraph it states, “the financial statements referred to above present fairly in all material respects” (Pany, Auditor's Report, 2010). Since this audit was concluded to have an adverse opinion, the report should not state fairly presented, but not fairly presented. The use of presented fairly refers to an unqualified opinion.
D. In the opinion paragraph it states, “applied on a basis consistent with that of the proceeding year” (Pany, Auditor's Report, 2010). To me this is just excessive words to make the report longer. We are not auditing 20x7 financial statements but 20x8 financial statements so there is no need to refer back to that year. The opinion paragraph is to consist of only one sentence which is a restatement from previous paragraphs and includes the opinion of the auditors.
E. At the bottom of this report it states, “As
Cited: Pany, R. W. (2010). Auditor 's Report. In R. W. Pany, Principles of Auditing & Other Assurance Services (pp. 681-682). New York: McGrwa-Hill/Irwin. Pany, R. W. (2010). Professional Standards. In R. W. Pany, Principles of Auditing & Other Assurance Services (pp. 41-46). New Yorl: McGraw-Hill/Irwin.