ACC 315 5-1 Problem Set Question 5 of 10

Chapter 10:  Assessing and Responding to Fraud Risks Assessing the risk of fraud in a financial statement audit is a difficult audit judgment.  Auditing standards require the auditor to perform several audit procedures to accumulate  information to assess the risk of fraud.  You are the in-charge auditor responsible for planning the financial statement audit of Spencer, Inc. Two new staff auditors are assisting you with the initial audit planning and have asked you the questions below.  Please summarize your responses to these staff auditor questions: a.  What is the purpose of the audit team's brainstorming session? b.  Who should attend the brainstorming session and when should the session be held? c.  What is the role of the two staff auditors in the brainstorming session? d.  What is the auditor's responsibility under auditing standards for detecting fraud? e.  What must the auditor document in the working papers related to the brainstorming session?

Accounting 20. Below is an internal control associated with some financial statement audit cycle that the auditors identified for one of their clients. Indicate the control activity that is being considered in question bonder this case. "The president of the company signs the checks once he compares the drawn check against the documents that substantiate the disbursement (underlying documents)." a. Segregation of tasks (adequate separation of duties) b. Adequate documents and records c. Physical controls over assets and records (physical controls) d. Proper authorization of transactions and activities

Enron corporation: accounting fraud what five recommendations you would suggest to strengthen the independent audit function following the Enron sandal? what responsibilities, if any, do audit firm have with regard to the quarterly financial statements of their client?

#24

Chapter 13:  Overall Audit Strategy and Audit Program The following are two situations, all involving non-public companies, in which the auditor is required to develop an audit strategy: 1.  The client has inventory at approximately 50 locations in a three state region.  This inventory is difficult to count and can be observed only by traveling by car. The internal controls over acquisitions, cash disbursements, and perpetual records are considered effective.  This is the fifth year that you have done the audit, and audit results in the past have always been excellent. 2.  This is the first year of an audit of a medium sized company that is considering selling its business because of severe under financing.  A review of the acquisition  and payment cycle indicates that controls over cash disbursements are excellent but controls over acquisitions cannot be considered effective. The client lacks receiving reports and a policy as to the proper timing to record acquisitions.  When you…

QUESTION 22 Match the term on the left with the appropriate definition or description on the left. A. A requirement of the Sarbanes-Oxley Act B. A group of measures intended to reduce or detect fraud C. A framework for assessing the risk of fraud D. The set of accounting rules that publicly traded companies must follow v Fraud triangle v Audited financial statements v Internal controls v Segregation of duties E. One specific measure taken to reduce the opportunity for fraud F. A licensing requirement for auditors of public firms v Cerified Public Accountant v GAAP

Provide explanation

Question 18 According to the PCAOB, during the audit of internal controls for an issuer (public company), the ultimate objective of testing the design effectiveness of internal controls is to:     Determine whether the company's controls are processing data effectively.     Determine whether the company's controls will satisfy control objectives and prevent or detect errors or fraud that could result in material misstatements to the financial statements.     Determine that the company's employees are processing the controls according to policy and procedures manuals at the company.     None of the answers provided are correct..

Assignment 1: Individual research/essay You are a newly hired fraud examiner. You have been asked to write a preliminary report on the Paving Company Case scenario based on the information presented in Units 1 to 4 and findings from your additional research.  Your report should not exceed 2,000 words. The word limit is not inclusive of the bibliography and cover page.  In your response, the following points must be addressed fully: a)      Determine the type of fraud committed and describe the symptoms of fraud that might be evident to an investigator.  b)      As discussed in units 1 to 4, all frauds involve key elements. Identify and describe using examples the elements of the Sharp's fraud.  c)       In the scenario, Sharp’s employer has been putting more emphasis on controlling costs for the various businesses. With the slowing of overall spending in the construction sector, Travolta had ordered managers to closely monitor expenses. He had sold several companies and has given vice…

Discussion Question 37:  Explain why Benford's Law is useful to auditors in the detection of fraud. (write a one page response for each question):

From pages 4-1 and 4-2 of the VLN, the COSO Framework describes 5 components of internal control. What is the purpose of internal controls from a financial accounting perspective? 1. To guarantee no fraud will occur in the organization. 2. To help safeguard the company's assets. 3. To help improve the accuracy and reliability of the accounting information. 4.To prevent collusion. Group of answer choices A. 1,2, and 3 B. 2 and 3 C. 2, 3, and 4 D.1, 2, 3, and 4

25-The manager of ABC SAOG is presently out of country for business purpose. The company has produced photocopies of fixed deposits receipts. The original fixed deposit receipts were kept in the locked iron safe of the manager. As an auditor what step can be taken?   a-Withdraw from the audit if legally permissible b-Mention the case in the auditors opinion c-Obtain external confirmation from bank manager d-Modify the audit report

Problem 7: Auditing Sales/Revenue TransactionsWhen an auditor needs to obtain an understanding of the overall internal control of a company, the auditor             first needs to consider the elements of the control environment. To assist the auditor in assessing the level of control risk, the following tests of controls were designed to allow the auditor to determine if the company’srelated controls were operating effectively in the revenue cycle.                                                    Determine which of the four management assertion(s) apply to each individual sales (revenue) control being discussed. Hint: many have more than one assertion.                                                     Management Assertions:  Existence & Occurrence, Rights, Completeness, Valuation                                                                                         1. The company segregates the duties for authorizing, approving customer credit, shipping merchandise,…