AUDITING & ASSURANCE SERVICES CONNECT AC
10th Edition
ISBN: 9781259292057
Author: MESSIER
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 13.28P
a.
To determine
Concept Introduction:
To discuss:The evidence in the working paper to support the fact that the audit was adequately planned and the assistance was properly supervised
b.
To determine
Concept Introduction:
Audit procedure: audit procedure is a method performed by the auditor, to gather the possible document that helps the auditors to make a strong conclusion. The audit procedure helps to determine the nature of the financial information provided by the customers and all kinds of risks that occur in the financial statements. Audit procedure performs different test of controls to avoid the risks.
The substantive test that should expect to find in working paper to document management’s assertion about completeness
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Read the given cases. Then, identify the most applicable technique of gathering evidence in each case. 1. Anna Santos audited the information system of Flores Corporation. Upon her evidence collection, she wanted to verify if the management assumes full responsibility for formulating, developing, documenting, promulgating, and controlling policies covering general aims and directives. 2. Veronica is the information systems (IS) auditor of Puno Corporation. In the execution of the audit, Veronica wants to know how the controls are established in the departments within the organization. Specifically, she wants to know how responsibilities are segregated in each department. 3. Brylle is one of the auditors of Alejandria Corporation (AC). He was assigned to test the controls over the cash of Alejandria. The accountant of AC prepares monthly bank reconciliation through the use of Microsoft Excel. Brylle wanted to know if the final amounts in the bank reconciliation are correct…
During the audit of Seahorse LLC, the external auditors, Packhorse CPAS, have just completed their audit of the clients
system of internal control and have documented their findings accordingly. One of Packhorse CPAs audit managers is
discussing the results of the internal control audit with an audit intern, Halle. Halle is curious as to what the auditing firm
will do with this information and these findings, and whether it affects any future parts of the audit. Which of the
following responses is correct with respect to helping
Halle understand this?
• The audit of internal control is performed by the audit firm to comply with generally accepted auditing standards. With
this part of the audit complete, the auditor can render an opinion on the client's financial statements.
• Once the audit of the client's system of internal control is complete, the auditor examines the findings and apprises the
client's management of any weaknesses in a timely manner. If weaknesses in internal control…
North, CPA, is planning an independent audit of the financial statements of General Company. In determining the nature, timing, and extent of the audit procedures, North is considering General’s internal audit function, which is staffed by Tyler.Required:a. In what ways can the internal auditor’s work be relevant to North, the independent auditor?b. What factors should North consider, and what inquiries should North make in deciding whether to use Tyler’s internal audit work?
Chapter 13 Solutions
AUDITING & ASSURANCE SERVICES CONNECT AC
Ch. 13 - Prob. 13.1RQCh. 13 - Prob. 13.2RQCh. 13 - Prob. 13.3RQCh. 13 - Prob. 13.4RQCh. 13 - Prob. 13.5RQCh. 13 - Prob. 13.6RQCh. 13 - Prob. 13.7RQCh. 13 - Prob. 13.8RQCh. 13 - Prob. 13.9RQCh. 13 - Prob. 13.10RQ
Ch. 13 - Prob. 13.11RQCh. 13 - Prob. 13.12RQCh. 13 - Prob. 13.13RQCh. 13 - Prob. 13.14MCQCh. 13 - Prob. 13.15MCQCh. 13 - Prob. 13.16MCQCh. 13 - Prob. 13.17MCQCh. 13 - Prob. 13.18MCQCh. 13 - Prob. 13.19MCQCh. 13 - Prob. 13.20MCQCh. 13 - Prob. 13.21MCQCh. 13 - Prob. 13.22MCQCh. 13 - Prob. 13.23MCQCh. 13 - Prob. 13.24MCQCh. 13 - Prob. 13.25MCQCh. 13 - Prob. 13.26MCQCh. 13 - Prob. 13.27PCh. 13 - Prob. 13.28PCh. 13 - Prob. 13.29PCh. 13 - Prob. 13.30PCh. 13 - Prob. 13.31PCh. 13 - Prob. 13.32P
Knowledge Booster
Similar questions
- Pierce, an independent auditor, was engaged to examine the financial statements of Wong Construction, Inc., for the year ended December 31. Wong's financial statements reflect a substantial amount of mobile construction equipment used in the firm's operations. The equipment is accounted for in a subsidiary ledger. Pierce developed an understanding of internal control and set the control risk at moderate. Required: Identify the substantive audit procedures Pierce should utilize in examining mobile construction equipment and related depreciation in Wong's financial statements.arrow_forwardYou are an auditor working with JUMAN audit firm. JUMAN audit firm accepted two engagements to audit the financial statements of MUNER company and MUHEET company. Explain how risk of material misstatement should he assessed and what effect that assessment will have on detection risk for the following two audit clients: MUNER firm, is a fast-growing trucking company operating in the southeastern part of the West Bank. The company is publicly held, but Hafeth Khalil and his sons control 58 percent of the stock. Hafeth Khalil is chairman of the board and CEO. He personally makes all major decisions with little consultation with the board of directors. Most of the directors, however, are either members of the Khalil family or long-standing friends. The board basically rubber-stamps Hafeth Khalil's decisions.arrow_forward1) You are running an audit firm at muscat and you are appointed as the auditor of Assarain Furnishing LLC, which is a leading supplyier of furnitures across the Gulf. You are provided with its financial statement for the year 2021 for conducting audit. Answer the following questions based on the same. a) Discuss the procedures to be followed by you at the time of examining the evidences? b) How can you ensure the reliability of audit evidences?arrow_forward
- You were recently hired by the CPA firm Honson & Hansen. Before you start working, the firm requires that you participate in the first-year staff training course. The instructor asks you to prepare answers for the following questions: a. How is audit evidence defined? b. How is the collection of audit evidence related to management assertions? c. What are the two key characteristics of audit evidence that an auditor must consider when evaluating the quality of the evidence? Describe the meaning of each of these characteristics in the context of auditing.arrow_forwardField, CPA, is auditing the financial statements of MillerMailorder, Inc. (MMI). Field has compiled a list of possible inherentand fraud risks in the revenue cycle that may result in the misstatementof MMI’s financial statements and a corresponding list ofinternal controls, which, if properly designed and implemented,could assist MMI in preventing or detecting material misstatements.For each risk numbered 1 through 15 in column 1, select one internalcontrol from column 2 (labeled a. through t.), which, if properlydesigned and implemented, most likely could assist MMI in preventingor detecting material misstatements. Internal controls can beselected for more than one risk.arrow_forwardKhalid has appointed as an auditor of Gulf Trading Company. Which of the following is the general perception Khalid must keep in mind to increase the reliability of audit evidence? O a. Audit evidence obtained directly by an auditor O b. Audit evidence obtained from dependent sources outside the entity O C. Audit evidence obtained orally O d. Audit evidence obtained from managementarrow_forward
- (b) You are the audit partner in Jason & Associates. Jason & Associates have accepted a recent engagement for a retail company called, Food Co-op. You have obtained the Annual Financial Statements of Food Co-op and studied the opening balances. As part of the audit plan you have decided to place reliance on the work of the prior auditors. Explain what are the main procedures you would have to perform to place reliance on the work of the prior auditors, i.e. in this case the opening balances?arrow_forwardJuan Dela Cruz has been asked to accept an engagement to audit a small financial institution. Juan Dela Cruz has not been previously audited a financial institution. Required: Describe the types of knowledge about the prospective client and its industry that Juan Dela Cruz must obtain to plan the engagement Explain how Juan Dela Cruz may obtain this knowledge Discuss how this knowledge of the client’s business and industry will help Juan Dela Cruz in planning and performing an audit in accordance with auditing standards.arrow_forwardLauren Yost & Co., a medium-sized CPA firm, was engagedto audit Stuart Supply Company. Several staff were involved in the audit, all of whomhad attended the firm’s in-house training program on effective auditing methods.Throughout the audit, Yost spent most of her time in the field planning the audit,supervising the staff, and reviewing their work.A significant part of the audit entailed verifying the physical count, cost, and summarization of inventory. Inventory was highly significant to the financial statements, and Yostknew the inventory was pledged as collateral for a large loan to First City National Bank.In reviewing Stuart’s inventory count procedures, Yost told the president she believedthe method of counting inventory at different locations on different days was highlyundesirable. The president stated that it was impractical to count all inventory on thesame day because of personnel shortages and customer preference. After considerablediscussion, Yost agreed to permit the…arrow_forward
- Nakamura, CPA. has accepted an engagement to audit the financial statements of Grant Manufacturing Company, a new client. Grant has an adequate control environment and a reasonable segregation of duties. Nakamura is about to set the control risk for the assertions related to Grant's property and equipment. Required: Describe the key internal controls that should be in place related to Grant's property, equipment, and related transactions (additions, transfers, major maintenance and repairs, retirements, and dispositions) that Nakamura may consider in setting the control risk.arrow_forwardElizabeth Johnson, CPA, has completed the audit of notespayable and other liabilities for Valley River Electrical Services and now plans to auditcontingent liabilities and commitments.a. Distinguish between contingent liabilities and commitments and explain why bothare important in an audit.b. Identify three useful audit procedures for uncovering contingent liabilities thatJohnson will likely perform in the normal conduct of the audit, even if she had noresponsibility for uncovering contingencies.c. Identify three other procedures Johnson is likely to perform specifically for the purpose of identifying undisclosed contingencies to help her obtain evidence about thecompleteness presentation and disclosure objective.arrow_forwardJohnson is an audit senior of a CPA firm. He is assigned to the audit of inventory for a large retail client which operates throughout the city with more than 50 stores. However, the internal controls of this client are effective as assessed in the past and Johnson wishes to rely on them. He asks his assistant Peter to perform the following tests of controls, among others. 1. Account for a sequence of shipping documents such as bills of lading and receiving reports. 2. Inquire management of the procedures to identify obsolete inventory items. 3. Read contracts of sales to determine whether goods are on consignment. 4. Observe the compilation of inventory list for taking inventories. Required: For each of the above tests of controls, identify the balance-related audit objective(s), the possible misstatements if the controls do not work satisfactorily and an audit test that could discover the misstatements.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education