Audit planning consists of eight steps‚ illustrated in Table 8-1: 1. Accept the client and perform initial audit planning 2. Understand the client’s business and industry 3. Assess client business risk 4. Perform preliminary analytical procedures 5. Set materiality and assess acceptable audit risk and inherent risk 6. Understand internal control and assess control risk 7. Gather information to assess fraud risks 8. Develop overall audit plan and program 8-2 Make Client Acceptance Decisions and Perform
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ADMINISTRATION PAYCHECK FILE How many records are there in database? There are 147 records in the paycheck file. How many data validity errors are there in the database? There were no validity errors in the database; all records are entered into the system‚ thus makes it all valid. What are the following totals? Gross Pay (TOTAL_GROS) = 178‚831 Taxes withheld (TOTAL_TAXE) = 36‚584 Deductions withheld (TOTAL_DEDU) = 24‚947 Net Pay (NET_PAY) = 117‚292 EMPLOYEE FILE How many records are
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SEMESTER 1‚ 2013 SEMINAR 9 - PROBLEM QUESTIONS PROBLEM 9.1 While assessing the risk of material misstatement and determining the appropriate response with regard to the inventory of Ace Computers Ltd (Ace) for the year ended 30 June 2011 audit‚ you become aware of the following information: 1. The best-selling computer presentation package has been experiencing a high level of returns owing to suspected software problems. 2. Based on closing inventory‚ inventory turned over
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AUDITING THEORY 1. Which of the following 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
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the Impact of Management Integrity on Audit Planning and Evidence Objective This research is done to assess the correlation between management integrity and RMM‚ audit planning and misstatement detection‚ which leads to analysis of the impact of management integrity information on audit conduct. Motivation Some cases of failures such as Enron and Sarbanes-Oxley have led public in general requiring auditors to be more careful in conducting their audit tasks‚ especially in terms of audited
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regards to the accounting for loss and gain contingencies and the proper way to disclosure the contingency. ASC 450 also directs auditors on how management should assess the probability of a contingency. Lastly‚ the excerpt explains the determination of which financial period the loss or gain should be reported in. The planning stage of the audit should identify elements and techniques that help auditors recognize the potential for losses arising from legal contingencies. These losses are not
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of an audit manager that is currently employed with Deep Breath LCC‚ a medium sized national accounting firm. This particular firm offers auditing services as well as tax services. The main purpose of my role as the audit manager is to decide and justify reasons on a new audit client acceptance. The process of accepting a new client is not a simple procedure especially during this phase where the public accounting environment is changing drastically. Intense competitive pressures among audit firms
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Audit Exam Changes 2013 The U.S. CPA Exam is considered by many to be the gold standard of accounting credentialing exams. There are four sections of the CPA Exam: Financial accounting and reporting (FAR) Auditing and attestation (AUD) Business environment and concepts (BEC) Regulation (REG) Each of these sections test different aspects of the accounting profession‚ from financial accounting to audit and business environment. These four sections represent a total of 14 hours of testing. The
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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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Audit Evidence This chapter deals with the types of evidence decisions auditors make‚ the evidence available to auditors‚ and the use of that evidence in performing audits. NATURE OF EVIDENCE • Evidence is any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria. • Evidence includes information that is highly persuasive‚ such as the auditor ’s count of marketable securities‚ and less persuasive information
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