Auditing and Assurance Services (16th Edition)
16th Edition
ISBN: 9780134065823
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Question
Chapter 26, Problem 19.2MCQ
To determine
Identify the option which best describes the internal auditor.
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Students have asked these similar questions
Which of the following is not a way by which the Sarbanes-Oxley Act attempts to ensure auditor independence from an
audit client?
Multiple Choice
The auditing firm must be appointed by the client's audít committee.
The audit committee must be composed of members of the client's board of directors who are
independent of the management.
Audit fees must be approved by the Public Company Accounting Oversight Board.
The external auditor cannot also perform financial information system design and implementation work.
Auditors must use their professional judgment_
O to distinguish if a misstatement or scope limitation is just material or pervasively material
O to distinguish if a misstatement or scope limitation is just immaterial or pervasively material
O to determine if the firm has the ability to pay the auditor for services rendered
O in selecting the client's audit committee
Why is it important for auditors to consider the possibility of fraud by employees or management on every audit engagement? Why must they consider the possibility that the client has not complied with laws.
Chapter 26 Solutions
Auditing and Assurance Services (16th Edition)
Ch. 26 - Prob. 1RQCh. 26 - Prob. 2RQCh. 26 - Prob. 3RQCh. 26 - Prob. 4RQCh. 26 - Prob. 5RQCh. 26 - Prob. 6RQCh. 26 - Prob. 7RQCh. 26 - Prob. 8RQCh. 26 - Prob. 9RQCh. 26 - Prob. 10RQ
Ch. 26 - Prob. 11RQCh. 26 - Prob. 12RQCh. 26 - Prob. 13RQCh. 26 - Prob. 14RQCh. 26 - Prob. 15RQCh. 26 - Prob. 16.1MCQCh. 26 - Prob. 16.2MCQCh. 26 - Prob. 16.3MCQCh. 26 - Prob. 17.1MCQCh. 26 - Prob. 17.2MCQCh. 26 - Prob. 17.3MCQCh. 26 - Prob. 18.1MCQCh. 26 - Prob. 18.2MCQCh. 26 - Prob. 18.3MCQCh. 26 - Prob. 19.1MCQCh. 26 - Prob. 19.2MCQCh. 26 - Prob. 19.3MCQCh. 26 - Prob. 20DQPCh. 26 - Prob. 21DQPCh. 26 - Prob. 22DQPCh. 26 - Prob. 23DQPCh. 26 - Prob. 24DQPCh. 26 - Prob. 25DQP
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Similar questions
- The auditor prepares the financial statements for DecoPaints SAOG while also serving as the auditor for DecoPaints SAOG Company. By having the auditor review his or her own work, the auditor cannot be expected to form an unbiased opinion on the financial statements. Which threat may occur when a previous judgment needs to be re-evaluated by the professional accountant responsible for that judgment? Intimidation threats Advocacy threats Self-review threats Self-interest threatsarrow_forwardWhich of the following statements is false when a company’s internal audit department is asked to complete consulting work? In some instances, management or the audit committee may be somewhat averse to the concept that internal auditors should provide consulting services, primarily because they fear it would impair the internal auditors’ objectivity. the internal audit charter should include provisions for consulting engagements as the internal audit function would then have access to all areas of the organization when performing consulting engagements as it does when performing assurance engagements. Not including consulting services in the charter will never create confusion should the internal audit function decide to provide any form of advice, and will never increase the likelihood for disagreement regarding the internal audit function’s position on consulting services.arrow_forwardWhich of the following statements is correct regarding auditor independence in fact and in appearance? The auditor should be independent both in fact and in appearance. The auditor should be independent in fact but not in appearance. O The auditor should be independent in appearance but not in fact. When the auditor does not challenge an inappropriate journal entry made by the client in order to keep the client for future audits, this is an example of loss of independence in appearance.arrow_forward
- From a conceptual standpoint, how do the requirements of Sarbanes–Oxley related to nonaudit services affect perceptions of the auditors’ independence?arrow_forwardAuditors are important because they are able to provide assurance of an organization's financial statements from an objective and independent opinion. It benefits the company in several ways, such as maintaining consistency, finding errors in their processing, or detecting fraud. While performing work , the auditors may face situations when they will not be able to fulfill ethical requirements. Answer the following three questions based on the above case By having the auditor review his or her own work, the auditor cannot be expected to form an unbiased opinion on the financial statements. Which threat may occur when a previous judgment needs to be re-evaluated by the professional accountant responsible for that judgment? a. Self-review threats b. Advocacy threats c. Intimidation threats d. Self-interest threatsarrow_forwardUrgentarrow_forward
- What steps do you believe auditors should take if the client is not pleased with the type of audit report issued by the auditors, based on the evidence they collected?arrow_forwardIf an auditor believes that an understanding with an audit client has not been established he or she should? State what should an auditor do and explain.arrow_forwardWhich of the following statements relating to internal and external audits is false?* The execution of solutions to issues brought to light by internal auditors are the responsibility of management of the organization. Independence is a fundamental ethical principle for internal auditors. For financial auditing, the audit report typically goes to many users of financial statements, whereas operational audit reports are intended primarily for management. The objectives of internal auditors are considerably broader than the objectives of external auditors.arrow_forward
- The auditor’s primary consideration is whether, and how, internal control prevents, or detects and corrects: illegal actions of the Management None of these options Material misstatement of the entity’s financial statements Incentives that prompt an employee to behave improperlyarrow_forwardWhich of the following BEST (select one) describes why auditors must maintain independence? a) The value of the audit report is higher if the report is free of bias. b) The value of the audit report is lower if the report is free of bias. c) The value of the audit report is generally not impacted by the independence of the auditor. d) The value of the audit report depends on the due professional care of the auditor performing the work.arrow_forwardexplain each choices. Reportable conditions are matters that come to an auditor's attention and that should be communicated to an entity's audit committee because they represent Material irregularities or illegal acts perpetrated by management. Significant deficiencies in the design or operation of internal control. Flagrant violations of the entity's documented conflict of interest policies. Intentional attempts by client personnel to limit the scope of the auditor's work.arrow_forward
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