Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 1, Problem 29COQ
To determine
Identify the most important benefit of having an annual audit by a public accounting firm.
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Students have asked these similar questions
Independent auditors perform audits on the
financial reports of public companies. This
type of auditing can best be described as:
Select one:
O 1. a discipline that assures financial
information presented by
management.
O 2. an activity whose purpose is to
search for irregularities.
3. a regulatory function that prevents
the issuance of improper financial
information.
O 4. a professional activity that
measures and communicates
financial and business data.
Which of the following actions did the Treadway Commission recommend to reduce fraudulent financial reporting?
Establish financial incentives that promote integrity in the financial reporting process.
Identify and understand the factors that lead to fraudulent financial reporting.
Assess the risk of corruption and misappropriation of assets within the company.
Design and implement internal controls to provide reasonable assurance of preventing fraudulent financial reporting.
Which of the following is not a Sarbanes-Oxley Actrequirement intended to reduce fraud opportunities?a. Increase fines and jail sentences for fraud perpetrators.b. All public companies establish an audit committee ofindependent directors.c. Management of all public companies evaluates andreports on the effectiveness of internal control overfinancial reporting.d. External auditors of large public companies evaluateand report on the effectiveness of internal control overfinancial reporting.
Chapter 1 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 8RQCh. 1 - Prob. 9RQCh. 1 - Prob. 10RQ
Ch. 1 - Prob. 11RQCh. 1 - Prob. 12RQCh. 1 - Describe briefly the function of the GAO.Ch. 1 - Prob. 14RQCh. 1 - Prob. 15RQCh. 1 - Prob. 16RQCh. 1 - Prob. 17RQCh. 1 - Prob. 18RQCh. 1 - Prob. 19RQCh. 1 - Prob. 20RQCh. 1 - Prob. 21RQCh. 1 - Prob. 22RQCh. 1 - What characteristics make an accounting...Ch. 1 - Prob. 24RQCh. 1 - Prob. 25QRACh. 1 - A corporation is contemplating issuing debenture...Ch. 1 - Prob. 27QRACh. 1 - Prob. 28QRACh. 1 - Prob. 29AOQCh. 1 - Prob. 29BOQCh. 1 - Prob. 29COQCh. 1 - Prob. 29DOQCh. 1 - Prob. 29EOQCh. 1 - Prob. 29FOQCh. 1 - Prob. 29GOQCh. 1 - Which of the following did not precipitate the...Ch. 1 - Prob. 29IOQCh. 1 - Prob. 29JOQCh. 1 - Prob. 29KOQCh. 1 - Prob. 29LOQCh. 1 - Prob. 30OQCh. 1 - Prob. 31OQCh. 1 - Prob. 32OQCh. 1 - Prob. 33OQCh. 1 - Prob. 34OQCh. 1 - Prob. 35OQCh. 1 - Prob. 36OQCh. 1 - Prob. 37PCh. 1 - Prob. 38PCh. 1 - Will Williams, a college senior, has begun the...Ch. 1 - Smith Co., a local Dallas public accounting firm,...
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Similar questions
- Which of the following statements relating to internal and external auditors is correct? i. Internal auditors specialize in financial fraud and theft which are considered crime. ii. External auditors' scope of work should be determined by management of the company. iii. External auditors are trusted by government agencies, investors, and public. iv. Internal auditors maintain the internal control of the company and considered an in-house expert. a. i and iv b. ii and iii c. i and ii d. iii and ivarrow_forward(a) Explain how the new internal audit department of Adom Hotels could assist the directors in preventing and detecting fraud and error. (b) Describe additional functions, other than fraud investigations, the directors of Adom Hotels could ask the internal audit department to undertake.arrow_forwardAn independent audit aids in the communication of economic data because the audit ________. A. Confirms the exact accuracy of the management's financial representations. B. Lends credibility to the financial statements. C. Guarantees that the financial data are fairly presented. D. Assures the readers of financial statements that any fraudulent activity has been corrected.arrow_forward
- The auditor has a responsibility to the various users of financial statements including shareholders, debtors, creditors etc. for ensuring the fairness of these statements. In this regard, the auditor is governed by an audit framework as well as a regulatory environment that includes standards. Also, the auditor performs a risk assessment so that the audit strategy is adapted for detecting fraud or error that can contribute to a material misstatement of these financial statements. Please evaluate the impact information technology can have on the audit process focusing on the risks associated with internal controls?arrow_forwardPlease 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.arrow_forward34) Which threat may occur as a result of the financial or other interests of a professional accountant or of an immediate or close family member? a) Familiarity threats b) Self-review threats c) Advocacy threats d) Self-interest threatsarrow_forward
- Discuss the motives of why C-Suite executives would commit fraud and how understanding the motive for fraud can assist an auditor in the analysis of financial statements. Determine if government regulations such as SOX and PCAOB are effective in reducing unethical behavior of corporate executives, and if additional organizational controls could be applied to expose and reduce fraud committed by C-Suite executives.arrow_forward11)An auditor’s engagement letter most likely will include A.A request for permission to contact the client’s lawyer for assistance in identifying litigation, claims, and assessments. B.A reminder that management is responsible for illegal acts committed by employees. C.The auditor’s preliminary assessment of the risk factors relating to misstatements arising from fraudulent financial reporting. D.Management’s acknowledgment of its responsibility for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement. 12)Early appointment of the independent auditor will enableA. A more thorough examination to be performed. B.A proper study and evaluation of internal control to be performed. C.Sufficient competent evidential matter to be obtained. D.A more efficient examination to be planned. 13)An auditor who accepts an audit engagement and does not possess the industryexpertise of the business entity,…arrow_forward5. Please answer ASAP!!!arrow_forward
- Financial statements that have been audited and verified by an external auditor are considered more reliable in the business marketplace than those that have not. Hence, the role of an external auditor in financial report audit is to: Select one:a. Prevention and detection of unauthorised executive perks. b. Express an opinion whether the client's financial reports are fairly presented. c. Ensure the consistent implementation of policies and procedures. d. Ensure the consistent application of accounting policies.arrow_forwardWhen planning the audit, the auditor should make inquiries of management in order to do the following, except Group of answer choices Determine whether management and other within the entity (e.g., internal audit function) have knowledge of any actual, suspected or alleged fraud affecting the entity. Provide useful information concerning the risks of material misstatements in the financial statements resulting from management fraud. Obtain an understanding of the accounting and internal control systems management has put in place to address fraud and error. Obtain an understanding of management’s assessment of the risk that the financial statements may be materially misstated as a result of fraud.arrow_forwardWhich of the following is a reason that an entity may receive an audit? Select the best response and then click "Submit". O The entity has publicly traded stock. O The entity is required by regulators. O The entity is required by its lenders. Management wants assurance around accounting procedures and to reduce the risk of fraud. O All of the abovearrow_forward
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