EBK AUDITING & ASSURANCE SERVICES: A SY
11th Edition
ISBN: 9781260687668
Author: Jr
Publisher: MCGRAW-HILL LEARNING SOLN.(CC)
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 6.29P
a.
To determine
Concept Introduction:
Audit committee is a committee that includes all boards of directors to supervise all financial reporting in firms. This committee is responsible for any type of error occur in reporting or in internal and external audit. This committee is also helping to maintain the communication between the company and its management.
To Describe:The specific issues that internal control should be concern with respect to individual entities.
b.
To determine
Concept Introduction:
Audit committee is a committee that includes all boards of directors to supervise all financial reporting in firms. This committee is responsible for any type of error occur in reporting or in internal and external audit. This committee is also helping to maintain the communication between the company and its management.
To Describe:Whether the external auditors can rely on the internal audit’s work
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In which of the following situations does the auditor potentially lack objectivity?Select one:
a.
An auditor reviews the procedures for a new electronic data interchange connection to a major customer before it is implemented
b.
A former purchasing assistant performs a review of internal controls over purchasing four months after being transferred to the internal auditing department
c.
An auditor recommends standards of control and performance measures for a contract with a service organization for the processing of payroll and employee benefits.
d.
A payroll accounting employee assists an auditor in verifying the physical inventory of some fixed assets with value that is not considered material.
In deciding whether to accept a new manufacturing client, the auditor arranges a tour of the manufacturing plant. In your words elaborate the information the auditor may obtain during the tour that will help in planning and conducting the audit if client is accepted.
Urgent
Chapter 6 Solutions
EBK AUDITING & ASSURANCE SERVICES: A SY
Ch. 6 - Prob. 6.1RQCh. 6 - Prob. 6.2RQCh. 6 - Prob. 6.3RQCh. 6 - Prob. 6.4RQCh. 6 - Prob. 6.5RQCh. 6 - Prob. 6.6RQCh. 6 - Prob. 6.7RQCh. 6 - Prob. 6.8RQCh. 6 - Prob. 6.9RQCh. 6 - Prob. 6.10RQ
Ch. 6 - Prob. 6.11RQCh. 6 - Prob. 6.12MCQCh. 6 - Prob. 6.13MCQCh. 6 - Prob. 6.14MCQCh. 6 - Prob. 6.15MCQCh. 6 - Prob. 6.16MCQCh. 6 - Prob. 6.17MCQCh. 6 - Prob. 6.18MCQCh. 6 - Prob. 6.19MCQCh. 6 - Prob. 6.20MCQCh. 6 - Prob. 6.21MCQCh. 6 - Prob. 6.22MCQCh. 6 - Prob. 6.23MCQCh. 6 - Prob. 6.24MCQCh. 6 - Prob. 6.25PCh. 6 - Prob. 6.26PCh. 6 - Prob. 6.27PCh. 6 - Prob. 6.28PCh. 6 - Prob. 6.29PCh. 6 - Prob. 6.30PCh. 6 - Prob. 6.31P
Knowledge Booster
Similar questions
- An IT auditor is conducting data analysis procedures on an employee expense report file and notices several expenses for $24.99 from the same individual. The company’s policy requires that any expenses that are under $25.00 do not require a receipt. The IT auditor should: [SELECT ALL THAT APPLY a) Maintain professional skepticism and investigate these transactions further b) Pass on investigating these items further, focusing on higher dollar amounts c) Evaluate the business process approval controls, and related procedures d) Discuss fraud awareness and detection programs with management to gain an understanding of management’s commitment to fraud prevention and related entity-level anti-fraud controls.arrow_forwardAn audit strategy sets the direction, timing, and scope of an audit. Based on your audit knowledge, which of the following would be included in the audit strategy document? Select one:a. A flowchart of the entity's internal control system.b. The decision as to the combination of substantive testing and tests of control that would be adopted.c. The number of sales transactions to be tested.d. The results of the interim testing of payroll.arrow_forwardWhich of the following is true with respect to PCAOB inspections of accounting firms?a. All firms performing audits of public companies are required to have annual inspectionsconducted by the PCAOB.b. PCAOB inspections review a sample of audits conducted by firms as well as the firm’ssystems of quality control.c. All results of PCAOB inspections are made available to the public following the inspection.d. Firms performing audits of 100 or fewer public entities may elect to have a peer reviewconducted through the AICPA in lieu of a PCAOB inspection.arrow_forward
- You are auditing a client that supplies electrical products to retail stores and electrical contractors throughout the country.The client keeps its accounts receivable records on a computer system, which is updated at the end of each business day.You plan to audit accounts receivable balance as at the end of the financial year, and you have a generalised audit software (GAS) package available to help in this task.Required:Identify ten (10) substantive audit procedures that you could perform using generalised audit software (GAS) in relation to auditing the accounts receivable account.arrow_forwardThe internal control procedures in Valentine Company result in the following provisions Identify the principles of internal control that are being followed in each case. Employees who have physical custody of assets do not have access to the a. accounting records. Physical Controls Segregation of Duties Independent Internal Verification Establishment of Responsibility Human Resource Controls Each month, the assets on hand are compared to the accounting records by an b. internal auditor. Documentation Procedures A prenumbered shipping document is prepared for each shipment of goods to C. customers.arrow_forwardCase Study: Auditor's Responsibility for Non-Financial Information As an experienced auditor at a reputable accounting firm, you've been assigned to audit a large manufacturing company's financial statements. In addition to financial data, the company also discloses non-financial information related to sustainability, environmental impact, and social responsibility in its annual report. Your audit team is tasked with evaluating the reliability and accuracy of both financial and non-financial information to provide stakeholders with a comprehensive understanding of the company's performance and operations. During the audit process, you implement various procedures to fulfill your responsibility for auditing non-financial information: 1. Understanding Non-Financial Reporting Frameworks: Begin by familiarizing yourself with relevant non-financial reporting frameworks and standards, such as the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB). These…arrow_forward
- Patrick Houghton was meeting with his manager to plan audit strategy in order to determine the amount of time to spend testing the client's internal controls and conducting detailed testing of transactions and account balances. Determining the audit strategy occurs during which phase of the audit? a. client acceptance stage b. planning stage c. performing stage d. reporting stagearrow_forwardSelect the appropriate control activities for each of the following definitions. Definitions Control Activities a. The company should maintain security over assets and accounting records. Management should periodically determine whether the amounts of physical b. assets of the company match the accounting records. The company should provide employees with appropriate guidance to ensure C. they have the knowledge necessary to carry out their job duties. The actual performance of individuals or processes should be checked against d. their expected performance. Authorizing transactions, recording transactions, and maintaining control of the е. related assets should be separated among employees. To prevent improper use of the company's resources, only certain employees are allowed to carry out certain business activities.arrow_forwardAssertions are expressed or implied representations by management that are reflected in the financial statement components. The auditor performs audit procedures to gather evidence to test those assertions. Required: Your client is All's Fair Appliance Company, an appliance wholesaler. Select the most appropriate audit procedure from the following list and enter the number in the appropriate place on the grid. (An audit procedure may be selected once, more than once, or not at all.) Audit Procedure: 1. Review of bank confirmations and loan agreements. 2. Review of drafts of the financial statements. 3. Select a sample of shipping documents, match them with related sales invoices, and determine that they have been included in the sales journal and accounts receivable subsidiary ledger. 4. Select a sample of shipping documents for a few days before and after year-end. 5. Confirmation of accounts receivable. 6. Review of aging of accounts receivable with the credit manager. Assertion a.…arrow_forward
- 6. In which of the following situations does the internal auditor potentially lack objectivity? a. A payroll accounting employee assists an internal auditor in verifying the physical inventory of small motors. b. An internal auditor discusses a significant issue with the vice president to whom the auditee reports prior to drafting the audit report. c. An internal auditor recommends standards of control and performance measures for a contract with a service organization for the processing of payroll and employee benefits. d. A former purchasing assistant performs a review of internal controls over purchasing four months after being transferred to the internal audit department.arrow_forwardThe following are various activities an auditor doesduring audit planning.1. Determine the likely users of the financial statements.2. Identify whether any specialists are required for the engagement.3. Send an engagement letter to the client.4. Tour the client’s plant and offices.5. Compare key ratios for the company to those for industry competitors.6. Review management’s risk management controls and procedures.7. Review accounting principles unique to the client’s industry.8. Identify potential related parties that may require disclosure.For each procedure, indicate which of the first four parts of audit planning the procedureprimarily relates to: (1) accept client and perform initial audit planning; (2) understandthe client’s business and industry; (3) assess client business risk; (4) perform preliminaryanalytical procedures.arrow_forwardBelow are some audit procedures. Classify each procedure according to the following types of audit evidence: 1) inspection, 2) external confirmation, 3) recalculation, 4) observation, 5) inquiry of the client, 6) reperformance, and 7) analytical procedure. (each procedure can be used more than once or not at all) Audit Procedures Count inventory items and record the amount in the audit working papers. Stand by the payroll time clock to determine whether any employee "punches in" more than one time. Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year. Obtain information about the client's internal controls by asking questions of client personnel. Examine the purchase invoice for a piece of equipment and ensure that the equipment was received and is in operation. The auditor computes the debt covenant based on the financial information to ensure that the client's calculation was performed correctly. Obtain…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College