accordance with an identified financial reporting framework. An auditor is setting out to achieve enhanced credibility of information disclosed to increase reliability for the users of the financial statements. A definition from the Committee on Basic Auditing is as follows: A systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating
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ANSWERS TO END-OF-CHAPTER 16 QUESTIONS 16-1 The U.S. dollar. The primary reason for using the dollar was that it provided a relatively stable benchmark‚ and it was accepted universally for transactions. 16-2 Under the fixed exchange rate system‚ the fluctuations were limited to +1 percent and -1 percent. Under the floating exchange rate system‚ there are no agreed-upon limits. Currently‚ the 12 countries making up the EMU have their national currencies fixed to the euro; however‚ the
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the audit? The types of auditing samples are broken down into two different categories: statistical and non-statistical sampling. The purpose of auditing samples are designed to give the auditor the results he or she seeks‚ without having to completely audit 100% of the items within the audit population. Here are some of the different types of auditing samples broken out into the two categories: Statistical Sampling Methods: Random Sampling – Is an auditing method that basically means
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1. a. To the Board of Directors and Shareholders of L Inc.: We have audited L Inc.’s internal control over financial reporting as of December 31‚ 2012‚ based on control criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of Treadway Commission (COSO). L Inc.’s management is responsible for maintaining effective internal control over financial reporting‚ and for its assessment of the effectiveness of internal control over financial
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BCAF-05: ADVANCED AUDITING (MAJOR) Objective: This course aims at imparting knowledge about the advanced methods of auditing and there applications. Unit- I: Audit of Limited Companies: Inspection of documents Books and Registers. Audit of Preliminary expanses‚ profit prior to incorporation‚ public deposits‚ managerial remunerations‚ share capital. The Visible profits and dividends- meaning‚ provisions of Companies act in regard to declaration and payment of dividend. Auditor’s
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Question 1. Ethical Considerations (A) As an auditor when provide professional service and client have to follow the fundamental principle of the code of Ethics Integrity An auditor has to be fair and honest to the client. There is an obligation on the auditor to be straightforward and honest in all the professional and business relationships. In this case‚ an auditor has to be integrity to present their honest and fair to the client. Even Game’s Limited’s managing director is unhappy with
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Introduction 4 Findings 5 A. Inventory balances and purchases transactions 5 B. Trade receivables and credit sales system 5 C. Property‚ Plant and equipment (PPE) 6 D. Trade payables transactions and balances 6 Implications 8 A. Inventory balances and purchases transactions 8 B. Trade receivables and credit sales system. 10 C. Property‚ Plant and equipment (PPE) 12 D. Trade payables transactions and balances 15 Conclusion The following conclusions have been drawn out with regards to each segment
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Chapter 14 Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions Solution of Practising Problems 14-4 BestSellers.com could integrate its online ordering system with its inventory system so that a book shipment is made only after the customer’s credit card company approves the customer’s purchase. Because credit card issuers often transfer funds electronically almost immediately after a sale‚ BestSellers.com could also set up their system to
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AUDITING 4 INTERNAL CONTROL In business control is required for optimum utilizatiion of resources and for maximising the profits.business operations are carried on with the help of human agents and equipments.both require supervision to ensure that tasks assigned to them are carried out properly to avoid wastes and losses. Internal control required for small business is not identical with that required for a large business in the sense that in case of the former‚the entire control
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AUDIT TECHNIQUES I. NATURE and PURPOSE of AUDIT TECHNIQUES Auditing Techniques are the basic tools utilized by auditors to obtain audit evidences. Auditing Technique is defined as any technique as any technique used to determine deviations from actual accounting and controls established by a business or organization as well as uncovering problems in established processes and controls. Auditing Techniques can be used to aid organizations by uncovering errors in business practices and providing
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