Mr. Salim has appointed as an auditor of Shinas Mart LLC. At the end of the audit, he maintains audit documentation. Identify the purpose of the retention of the audit document. O a. Audit documentation is a part of client policy O b. Management is required to keep them in a safe custody to ensure confidentiality O C. Audit documentation is a part of accounting record O d. Audit documentation is the property of the auditor

Mr. Salim has appointed as an auditor of Shinas Mart LLC. At the end of the audit, he maintains audit documentation. Identify the purpose of the retention of the audit document. O a. Audit documentation is a part of client policy O b. Management is required to keep them in a safe custody to ensure confidentiality O C. Audit documentation is a part of accounting record O d. Audit documentation is the property of the auditor

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Management's assertions in the financial statements are of relevance to the audit process because a. they are the procedures that will be performed by the audit team. b. they are utilized by auditors in developing proper tests and procedures c. they are direct evidence that management has prepared financial statements in accordance with GAAS. d. they relate more to the audit while the financial statenent belong to the author.
Which of the following are rights of the auditors? a) The right to all information and explanations (from management) necessary for the proper conduct of the audit. b) The right to receive notice of all meetings of the shareholders (such as the annual general meeting) and to attend those meetings. c) The right to speak at shareholders’ meetings on matters affecting the audit or the auditor. d) The right to visit the branches of the audit firm and right to access all accounting books and records. e) The right to examine and evaluate financial and information systems, recommending controls to ensure system reliability and data integrity f) The right to review data about material assets, net worth, liabilities, capital stock, surplus, income and expenditures Only e) and f) Only d) , e) and f) Only a) , b) and c) Only a) , b) ,c) and d)
Explain why a company would hire internal auditors if they already have an external auditor. Compare the differences between an external audit and an internal audit. Review what you have learned about compliance audits. Determine when an auditor would be hired to perform a compliance audit.
An auditor’s client consent in writing is required before an auditor can disclose any information about his client to a third party. Highlight any FIVE obligations imposed by the ethical principle of professional competence and due care on Chartered Accountants.
Please respond promptly: When auditing a private company, the auditor should obtain an understanding of internal control sufficient to___________. Select one: a. Provide a method for safeguarding assets, checking the accuracy and reliability of accounting data, promoting operational efficiency, and encouraging adherence to prescribed managerial policies. b. Provide reasonable protection against client fraud and defalcations by client employees. c. Assess control risk. d. Provide a basis for suggestions to the client for improving the accounting system.
CPAs may audit around or through computers in the audit of the financial statements of clients who use IT to process accounting data. d. How can the CPAs be satisfied that the computer programs presented to them for testing are actually those used by the client for processing accounting data?
Under AICPA rules, which of the following services would generally be permitted to be provided to an audit client provided the general requirements are met? Firm accepting responsibility for monitoring client's IT controls (e.g., through automated tool) Providing advice and recommendations related to the application of an accounting standard Staff augmentation services Leading or supervising the audit client's accounting standards implementation team
Under Sarbanes–Oxley and PCAOB rules, ensuring that the auditor is independent inappearance is the responsibility ofa. The public accounting firm.b. Senior management.c. The audit committee.d. The PCAOB
In making client acceptance and continuance decisions, the auditor will perform various procedures in assessing the client. Which of these would most likely not be one of those procedures? a. obtain background checks on management to assess management integrity b. review regulatory filings and examination reports c. analyze client financial statements and compare to industry metrics d. submit management to a lie detector test
Indicate the alternative that best completes the following sentence: Upon obtaining factual documentation of unethical business conduct by the vice president, to whom the chief audit executive (CAE) reports, the CAE should do the following: Oa. Report the facts to the chief executive officer and the audit committee. Ob. Conduct an investigation to determine the extent of the vice president's involvement in the unethical acts. O c. Schedule an audit of the business function involved. d. Confront the vice president with the facts before proceeding with the investigation.
40 Based upon the nature, an auditor obtains audit evidence in three ways namely verbal, visual and documentary. What do you understand by verbal evidence? a. Evidence obtained visually and through documents. b. Documentary evidence c. Evidence obtained by physical verification assets d. Evidence obtained by asking oral explanation from the employees of the client
Which of the following types of audit evidence is the least persuasive? a. Bank statements obtained from the client. O b. O c. Prenumbered purchase order forms. O d. Correspondence from the client's attorney about litigation. Test counts of inventory performed by the auditor.