Auditing: A Risk Based-Approach to Conducting a Quality Audit
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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Chapter 6, Problem 55RSCQ
To determine

Introduction : The objective of this study is to analyze the analytical procedures in terms of the revenue of the company and how they contribute towards the evaluation as well as the prediction of the ‘Revenue’.

Analytical procedures in terms of the revenue of the company and how they contribute towards the evaluation as well as the prediction of the ‘Revenue’.

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Megan is performing an initial audit of a financial service institution. One of her first steps is to assess the reasonableness of opening balances. How should she proceed? a. Opening balances do not become easier to determine as experience is gained with a client, so Megan's procedures will be the same as for a continuing client. b. If the account balance turns over at least once an accounting period, Megan must perform extensive audit procedures. c. Megan can place reliance on the report submitted by the predecessor auditor, but that decision should be made by audit area. d. Because this is an initial audit, over auditing is not a concern; Megan must perform all possible procedures.
During the performance of risk assessment procedures, Andoy, CPA, noted a change in accounting principle has been effected by the client. In this case, Andoy should plan to evaluate the change to satisfy himself that: The newly adopted principle is a generally accepted accounting principle The method of accounting for the effects of the change is in conformity with generally accepted accounting principles Management's justification for the change is reasonable All of the answers
During the performance of risk assessment procedures, Andoy, CPA, noted a change in accounting principle has been effected by the client. In this case, Andoy should plan to evaluate the change to satisfy himself that:       a. The newly adopted principle is a generally accepted accounting principle       b. The method of accounting for the effects of the change is in conformity with generally accepted accounting principles       c. Management’s justification for the change is reasonable       d. All of the answers

Chapter 6 Solutions

Auditing: A Risk Based-Approach to Conducting a Quality Audit

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