Training Material on Internal Auditing Internal Auditing Handbook 1 Session 1 – External Audit........................................................................5 1.1 Definition and Objective.....................................................................5 1.2 Responsibilities of External Audit ......................................................5 1.3 Scope of the Audit .............................................................................6 1.4 Auditor’s Report Basic
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Assume that the audit team notes the client has made a significant change in its product line which requires that new equipment be purchased. Which of the following would be of greatest concern to the auditor? A. Inappropriate book value of new equipment. B. Impaired value of new equipment. C. Impaired value of old equipment. D. Inappropriate depreciation calculation for new equipment. 2. A. B. C. D. Audit procedures should be proportional to which of the following? The assessed Risks Size of the Client
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Question 1(12 marks) (1 mark for each relevant point) Scenario 1 o The auditor would need to confirm information provided by the CFO with the bondholder’s. o The CFO has classified the bond as current and provided a going concern note and therefore the financial statements are in compliance with GAAP. o The auditor would need to perform procedures as to the adequacy of the note disclosure. o If the going concern note disclosure is considered adequate‚ the auditor would issue an unqualified
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Hooplah‚ Inc. R1. (a) It is acceptable to use the same set of samples when testing both controls‚ as each “transaction” should pass through all of the controls in a business process. It becomes more efficient to test the same set‚ because the audit team could request a comprehensive documents package from the client. The sample size table in Appendix A indicates that a sample size of 58 is acceptable for the first control‚ but the higher estimated population deviation rate for the second control
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Case 03-05 Trademark‚ Inc. Part 1—Accounting Issues This case study is the first of a two-part Earnings Management Case. The purpose of Part 1 is to provide you with background information relating to Trademark‚ Inc. and raise several accounting and auditing issues affecting Trademark during the current fiscal year. The conclusions reached in this case study will be used in Part 2 — Misstatements & Materiality. Trademark‚ Inc.‚ a public company‚ designs‚ manufactures‚ and distributes greeting
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Proposal Energy Audit: An energy audit is an inspection‚ survey and analysis of energy‚ flows for energy conservation in a building‚ process or system to reduce the amount of energy input into the system without negatively affecting the output(s). Energy audit identifies opportunities for financial savings by elimination of wasteful use of electricity‚ coal and fuel oil‚ without affecting the process or quality of product. Need for Energy Audit: It has been established that Energy
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The documentary Food Inc. provides an eye-opening glimpse on the mass production of food and the process in which it reaches consumers. Personally‚ when I go to the supermarket‚ I never think about how the chicken‚ beef‚ or eggs I’m buying‚ actually got there. I was oblivious of the whole process. For instance‚ baby chicks are being modified to grow within 48 days compared to three months. Chickens are put in dark and overcrowded coops and some die daily because there bodies cannot handle their enlarged
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Organic Farming or Factory Farming? In the documentary‚ Food Inc.‚ director Robert Kenner reveals the truth of factory farming and organic farming. In the film‚ he interviews an organic farmer‚ Joel Salatin‚ who owns Poly Face Farm‚ in Swoope‚ Virginia. Salatin believes that animals should be fed with grass instead of corn. Corn is a natural resource that both the factory farm and organic farm uses. Factory farming use corn because it is cheap‚ easy to grow‚ and makes the animals fat very fast
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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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Marketing Audit Template Every existing business should undergo an internal or external Marketing Audit at least every 3 or 4 years. The Marketing audit is a review of its past marketing strategies. A Marketing Audit will identify whether the Marketing Strategy needs to be changed and identify the direction of where the company needs to go. Stark Reality provides clients with two types of very cost effective Marketing Audit options: 1. Do It Yourself – We’ll Check it and provide a Recommendation
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