EBK PRINCIPLES OF AUDITING & OTHER ASSU
21st Edition
ISBN: 9781260299434
Author: WHITTINGTON
Publisher: YUZU
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Chapter 17, Problem 32OQ
To determine
Review the audit report for 2015 and make it appropriate based on the given information.
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Omitted Procedures and Subsequently Discovered Facts—Internet Exercise. From the “Inspections” section of the PCAOB’s website, access the most recent inspection reports for each of the Big Four firms (Deloitte, EY, KPMG, and PwC). Each inspection report contains the following information:∙ An introductory preface.∙ Inspection procedures and observations, which include specific findings related to issuers (clients) (Part I).∙ A summary of the inspection process.∙ The firm’s response to the inspection report.Occasionally, the PCAOB’s inspection process identifies situations in which necessary audit procedures were not performed or in which the auditors did not identify departures from GAAP.
Required:a. What is the auditors’ responsibility with respect to subsequently discovered facts and omitted procedures?b. If one is provided, review and briefly summarize the firm’s response to the inspection report. Comment on whether you believe the firm’s response to omitted procedures and…
A lead audit engagement partner has been providing audit service to the same non-PIE audit client for the last 10 years. What type of threat to independence might this create?
Intimidation
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You 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 audit clients:
MUHEET Corporationis one of several companies engaged in the manufacture of high- speed, high- capacity data storage devices. The industry is very competitive and subject to quick changes in technology. MUHEET’s operating results would place the company in the second quartile in terms of profitability and financial position. The company has never been the leader in the industry, with its products typically slightly behind the industry leaders in terms of performance.
Chapter 17 Solutions
EBK PRINCIPLES OF AUDITING & OTHER ASSU
Ch. 17 - Prob. 1RQCh. 17 - What is the function of notes to financial...Ch. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - Prob. 10RQ
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- LetGrade SAOG has been audited by the same auditor for over 10 years and the auditor regularly plays football with the CEO and CFO of LetGrade SAOG. The auditor may have become well known with the client(LetGrade SAOG) and, thus, lack objectivity in their work.Which threat may occur in this case Familiarity threats Self-review threats Self-interest threats Advocacy threatsarrow_forwardLetGrade SAOG has been audited by the same auditor for over 10 years and the auditor regularly plays football with the CEO and CFO of LetGrade SAOG. The auditor may have become well known with the client(LetGrade SAOG) and, thus, lack objectivity in their work.Which threat may occur in this case Familiarity threats Self-interest threats Self-review threats Advocacy threatsarrow_forwardPlease help... :( thank you in advance!!!arrow_forward
- Tests of Controls: General Controls. The audit team of Packer Company identified thefollowing general controls in obtaining its overall understanding of Packer’s internal controlover the automated processing of transactions:1. Packer has routine maintenance on its computer equipment and related technology scheduled and performed every six months.2. Packer has formal, written systems development and documentation standards for theimplementation of new programs.3. Prior to implementing modifications to its existing programs, Packer tests and validatesthe program changes to ensure accurate processing.4. Packer has appropriately separated the responsibilities of systems analysts, programmers,and computer operators.5. Packer’s computer files are protected from loss through frequent backups and storage atan off-site location.6. Access to computer files and programs is protected through the use of passwords.7. On a monthly basis, Packer reviews any revisions in the access rights of its…arrow_forwardBased on the information in scenario C, classify the information (1-8) according to the elements of an audit finding (criteria, condition,cause, effect and recommendations)arrow_forwardBest Wood Furniture, Inc., a non-issuer that produces wood furniture, is undergoing a year 2 audit. The situations below describe changes made during year 2 that may or may not contribute to audit risk. For each situation, select the impact, if any, that the situation has on a specific component of audit risk for the year 2 audit. Selections are for once, more than once, or not at all. Consider each situation independently. Situation Impact on audit risk In year 2, the auditor noted that the company's newly hired purchasing agent was not obtaining competitive bids for all major purchase requisitions as required. Early in year 2, the company expanded its warranty program to cover additional major products in an effort to increase sales. The audit partner decided that the audit team needed to perform additional tests of detail over payroll in addition to the substantive analytical procedures done last year over payroll.…arrow_forward
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