Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Textbook Question
Chapter 2, Problem 42RSCQ
Refer to Exhibit 2.5 and answer the following questions.
a. (Sections 101, 104, and 105) How does the establishment and operation of the PCAOB help to ensure quality external audits? How will audit firm inspections and investigations by the PCAOB help ensure high audit quality?
b. (Sections 201-203) How do Sections 201-203 address audit ()r independence concerns?
c. (Section 206) What is a cooling-off period, and how does it address auditor independence concerns?
d. (Section 301) How do the audit committee requirements help ensure effective corporate governance?
e. (Sections 302 and 906) How do the officer certification requirements help to address the risk of fraud in publicly traded organizations? What is the likelihood that a CFO who is committing fraudulent financial reporting would sign the certification falsely, and what are your reactions to that possibility?
f. (Section 401) How does this section relate to the Enron fraud?
g. (Section 404) How do the management assessment and audit or attestation of internal controls contained in this section help to address the risk of fraud in publicly traded
organizations?
h. (Section 407) Why is it important that at least one member of the audit committee be a financial expert? What are the financial reporting implications if the audit committee does not have any individuals serving on it who possess financial expertise?
i. (Section 802) How does this section relate to the Enron fraud?
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Chapter 2 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 2 - The Great Salad Oil Swindle of 1963 is an asset...Ch. 2 - Prob. 2TFQCh. 2 - The three elements of the fraud triangle include...Ch. 2 - Prob. 4TFQCh. 2 - Prob. 5TFQCh. 2 - Prob. 6TFQCh. 2 - Prob. 7TFQCh. 2 - Prob. 8TFQCh. 2 - Prob. 9TFQCh. 2 - Prob. 10TFQ
Ch. 2 - Prob. 11TFQCh. 2 - Prob. 12TFQCh. 2 - Prob. 13MCQCh. 2 - Prob. 14MCQCh. 2 - Prob. 15MCQCh. 2 - Prob. 16MCQCh. 2 - Prob. 17MCQCh. 2 - Prob. 18MCQCh. 2 - Prob. 19MCQCh. 2 - Prob. 20MCQCh. 2 - Prob. 21MCQCh. 2 - Prob. 22MCQCh. 2 - Prob. 23MCQCh. 2 - Prob. 24MCQCh. 2 - Prob. 25RSCQCh. 2 - Prob. 26RSCQCh. 2 - Prob. 27RSCQCh. 2 - Refer to Exhibit 2.1 a. What is a Ponzi scheme? b....Ch. 2 - Prob. 29RSCQCh. 2 - Prob. 30RSCQCh. 2 - Prob. 31RSCQCh. 2 - Prob. 32RSCQCh. 2 - Prob. 33RSCQCh. 2 - Prob. 34RSCQCh. 2 - Prob. 35RSCQCh. 2 - Prob. 36RSCQCh. 2 - Prob. 37RSCQCh. 2 - Prob. 38RSCQCh. 2 - Many consider the Enron fraud to be one of the...Ch. 2 - Prob. 40RSCQCh. 2 - Prob. 41RSCQCh. 2 - Refer to Exhibit 2.5 and answer the following...Ch. 2 - Prob. 43RSCQCh. 2 - Prob. 44RSCQCh. 2 - Prob. 45RSCQCh. 2 - Prob. 46RSCQCh. 2 - Prob. 47RSCQCh. 2 - Prob. 48RSCQCh. 2 - Prob. 49RSCQCh. 2 - Prob. 50FFCh. 2 - Prob. 51FFCh. 2 - Prob. 52FF
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- After engaging Lakeside, your firm begins an analytic review. 1. Why do we begin an audit with an analytic Review? 2. In conducting your review you found an account that you thought deserved further analysis. Which account was this and why in your opinion should it receive further analysis? 3. How would you audit this account?arrow_forwardWhich of the following expressions best describes a situation under which the issuance of a report that concludes on the condition of the internal controls of an organization that provides technological services to one of our audit clients (SOC report) is required? It is that situation in which a CPA has been hired to evaluate a. the projected financial statements prepared by the client, to see if the expected results comply with hypothetical assumptions or not. b. the information systems and technologies subcontracted by the client, specifically in what corresponds to criteria of security, availability, integrity, confidentiality and privacy. c. any assertion or area that the client has asked to intervene (subject matter), and do so in accordance with compliance or not, with criteria or principles (against criteria). d. services that help the client maintain their financial independence.arrow_forwardWhat does an operational audit attempt to measure? Does an operational audit involve more or fewer subjective judgments than a compliance audit or an audit of financial statements? Explain. To whom is the report usually directed after completion of an operational audit?arrow_forward
- What is an audit, and how does it add to the integrity ofaccounting information?arrow_forwardWhat is a post-audit, why do firms use them, and what problems can arise when they are used?arrow_forwardExplain how analytical procedures are useful in: (1) The risk assessment stage of the audit. (2) The substantive procedures stage of the audit. (3) Near the end of the audit.arrow_forward
- How does control risk affect the nature, timing, and extent of further audit procedures?arrow_forwardWhy is reporting to management at the interim stage of an audit is important?arrow_forwardMust all observations identified by an internal audit team during an assurance engagement be acted upon by management? Explain. What are the implications for the internal audit function if management fails to respond appropriately to an observation warranting corrective action?arrow_forward
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