Meaning of Management Integrityisthe attitude of management towards Internal Control systems andsetting the example to the lower set of employees. To Define: Management Integrity and its influence over auditors’ decision on the type of audit evidence required. To find out possible sources of audit evidence and management’s ethics on finding out the misstatement that could impact their financial planning

Question

As an auditor, it is important to gain a comprehensive understanding of every aspect of a client’s internal control. This helps in evaluating control risk and preparing for the audit of the client’s financial statements. Choose one of the following questions to discuss: For what purposes should an auditor use their understanding of internal control components to plan an audit? What factors should an audit team consider when trying to reduce the planned assessed level of control risk below the maximum? What are the documentation requirements for a client’s internal control and assessed level of control risk?

Answer 1

Question

Chapter 7, Problem 14RQSC

a)

To determine

Introduction:Meaning of Management Integrityisthe attitude of management towards Internal Control systems andsetting the example to the lower set of employees.

To Define:Management Integrity and its influence over auditors’ decision on the type of audit evidence required. To find out possible sources of audit evidence and management’s ethics on finding out the misstatement that could impact their financial planning

b)

To determine

Introduction: Meaning of Management Integrity is the attitude of management towards Internal Control systems and setting the example to the lower set of employees.

To Define: The various possible sources of evidence which may be used by the Auditor to assess the management integrity.

c)

To determine

Introduction: Material misstatement is false information in financial statementswhich could affect the financial decisions of a person who relies upon the statement.

To Define: That if Management is refusing to correct a statement , which has been pointed out by the auditor and the impact of this misstatement is impacting the correct income of the organization and its relation with the analyst’s prediction based on the books of the client.

d)

To determine

Introduction:Management Integrity is an important parameter of the client’s risk structure and provides the base of internal control. Hence,the auditorshould carefully examine the management integrity in order to judge the credibility of evidence supplied by the management.

To Examine: The various scenarios and to study the negative impact on management integrity the related effect on the audit planning.

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As an auditor, it is important to gain a comprehensive understanding of every aspect of a client’s internal control. This helps in evaluating control risk and preparing for the audit of the client’s financial statements. Choose one of the following questions to discuss: For what purposes should an auditor use their understanding of internal control components to plan an audit? What factors should an audit team consider when trying to reduce the planned assessed level of control risk below the maximum? What are the documentation requirements for a client’s internal control and assessed level of control risk?

As IT auditors, it's critical that we establish a common "risk" language with management. Importantly, this common language should consider: a) How an IT risk may impact the organization's ability to generate revenue. b) How an IT risk may impact the customer experience. c) How an IT risk may impact the expenses and costs incurred by the organization, such as privacy legal fines for non-compliance. d) All of the above

A moral or legal obligation to ensure the safety or well-being of others Could be defined as duty of care. An auditor's duty of care to a client would most likely be breached if the auditor failed to: Select one: a.comply with the Cooperation Act 2001 & all relevant auditing standards. b. Resolve their staffing issues. c. conduct the audit for the cheapest price. d.Prevent & detect earnings of management.

Answer 2

Question

Chapter 7, Problem 14RQSC

a)

To determine

Introduction:Meaning of Management Integrityisthe attitude of management towards Internal Control systems andsetting the example to the lower set of employees.

To Define:Management Integrity and its influence over auditors’ decision on the type of audit evidence required. To find out possible sources of audit evidence and management’s ethics on finding out the misstatement that could impact their financial planning

b)

To determine

Introduction: Meaning of Management Integrity is the attitude of management towards Internal Control systems and setting the example to the lower set of employees.

To Define: The various possible sources of evidence which may be used by the Auditor to assess the management integrity.

c)

To determine

Introduction: Material misstatement is false information in financial statementswhich could affect the financial decisions of a person who relies upon the statement.

To Define: That if Management is refusing to correct a statement , which has been pointed out by the auditor and the impact of this misstatement is impacting the correct income of the organization and its relation with the analyst’s prediction based on the books of the client.

d)

To determine

Introduction:Management Integrity is an important parameter of the client’s risk structure and provides the base of internal control. Hence,the auditorshould carefully examine the management integrity in order to judge the credibility of evidence supplied by the management.

To Examine: The various scenarios and to study the negative impact on management integrity the related effect on the audit planning.

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Answer 3

Question

Chapter 7, Problem 14RQSC

a)

To determine

Introduction:Meaning of Management Integrityisthe attitude of management towards Internal Control systems andsetting the example to the lower set of employees.

To Define:Management Integrity and its influence over auditors’ decision on the type of audit evidence required. To find out possible sources of audit evidence and management’s ethics on finding out the misstatement that could impact their financial planning

b)

To determine

Introduction: Meaning of Management Integrity is the attitude of management towards Internal Control systems and setting the example to the lower set of employees.

To Define: The various possible sources of evidence which may be used by the Auditor to assess the management integrity.

c)

To determine

Introduction: Material misstatement is false information in financial statementswhich could affect the financial decisions of a person who relies upon the statement.

To Define: That if Management is refusing to correct a statement , which has been pointed out by the auditor and the impact of this misstatement is impacting the correct income of the organization and its relation with the analyst’s prediction based on the books of the client.

d)

To determine

Introduction:Management Integrity is an important parameter of the client’s risk structure and provides the base of internal control. Hence,the auditorshould carefully examine the management integrity in order to judge the credibility of evidence supplied by the management.

To Examine: The various scenarios and to study the negative impact on management integrity the related effect on the audit planning.

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Answer 4

Question

Chapter 7, Problem 14RQSC

a)

To determine

Introduction:Meaning of Management Integrityisthe attitude of management towards Internal Control systems andsetting the example to the lower set of employees.

To Define:Management Integrity and its influence over auditors’ decision on the type of audit evidence required. To find out possible sources of audit evidence and management’s ethics on finding out the misstatement that could impact their financial planning

b)

To determine

Introduction: Meaning of Management Integrity is the attitude of management towards Internal Control systems and setting the example to the lower set of employees.

To Define: The various possible sources of evidence which may be used by the Auditor to assess the management integrity.

c)

To determine

Introduction: Material misstatement is false information in financial statementswhich could affect the financial decisions of a person who relies upon the statement.

To Define: That if Management is refusing to correct a statement , which has been pointed out by the auditor and the impact of this misstatement is impacting the correct income of the organization and its relation with the analyst’s prediction based on the books of the client.

d)

To determine

Introduction:Management Integrity is an important parameter of the client’s risk structure and provides the base of internal control. Hence,the auditorshould carefully examine the management integrity in order to judge the credibility of evidence supplied by the management.

To Examine: The various scenarios and to study the negative impact on management integrity the related effect on the audit planning.

Expert Solution & Answer

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Answer 5

Chapter 7, Problem 14RQSC

a)

To determine

Introduction:Meaning of Management Integrityisthe attitude of management towards Internal Control systems andsetting the example to the lower set of employees.

To Define:Management Integrity and its influence over auditors’ decision on the type of audit evidence required. To find out possible sources of audit evidence and management’s ethics on finding out the misstatement that could impact their financial planning

b)

To determine

Introduction: Meaning of Management Integrity is the attitude of management towards Internal Control systems and setting the example to the lower set of employees.

To Define: The various possible sources of evidence which may be used by the Auditor to assess the management integrity.

c)

To determine

Introduction: Material misstatement is false information in financial statementswhich could affect the financial decisions of a person who relies upon the statement.

To Define: That if Management is refusing to correct a statement , which has been pointed out by the auditor and the impact of this misstatement is impacting the correct income of the organization and its relation with the analyst’s prediction based on the books of the client.

d)

To determine

Introduction:Management Integrity is an important parameter of the client’s risk structure and provides the base of internal control. Hence,the auditorshould carefully examine the management integrity in order to judge the credibility of evidence supplied by the management.

To Examine: The various scenarios and to study the negative impact on management integrity the related effect on the audit planning.

Answer 6

Chapter 7, Problem 14RQSC

a)

To determine

Introduction:Meaning of Management Integrityisthe attitude of management towards Internal Control systems andsetting the example to the lower set of employees.

To Define:Management Integrity and its influence over auditors’ decision on the type of audit evidence required. To find out possible sources of audit evidence and management’s ethics on finding out the misstatement that could impact their financial planning

Answer 7

Chapter 7, Problem 14RQSC

a)

To determine

Introduction:Meaning of Management Integrityisthe attitude of management towards Internal Control systems andsetting the example to the lower set of employees.

To Define:Management Integrity and its influence over auditors’ decision on the type of audit evidence required. To find out possible sources of audit evidence and management’s ethics on finding out the misstatement that could impact their financial planning

Answer 8

b)

To determine

Introduction: Meaning of Management Integrity is the attitude of management towards Internal Control systems and setting the example to the lower set of employees.

To Define: The various possible sources of evidence which may be used by the Auditor to assess the management integrity.

Answer 9

b)

To determine

Introduction: Meaning of Management Integrity is the attitude of management towards Internal Control systems and setting the example to the lower set of employees.

To Define: The various possible sources of evidence which may be used by the Auditor to assess the management integrity.

Answer 10

c)

To determine

Introduction: Material misstatement is false information in financial statementswhich could affect the financial decisions of a person who relies upon the statement.

To Define: That if Management is refusing to correct a statement , which has been pointed out by the auditor and the impact of this misstatement is impacting the correct income of the organization and its relation with the analyst’s prediction based on the books of the client.

Answer 11

c)

To determine

Introduction: Material misstatement is false information in financial statementswhich could affect the financial decisions of a person who relies upon the statement.

To Define: That if Management is refusing to correct a statement , which has been pointed out by the auditor and the impact of this misstatement is impacting the correct income of the organization and its relation with the analyst’s prediction based on the books of the client.

Answer 12

d)

To determine

Introduction:Management Integrity is an important parameter of the client’s risk structure and provides the base of internal control. Hence,the auditorshould carefully examine the management integrity in order to judge the credibility of evidence supplied by the management.

To Examine: The various scenarios and to study the negative impact on management integrity the related effect on the audit planning.

Answer 13

d)

To determine

Introduction:Management Integrity is an important parameter of the client’s risk structure and provides the base of internal control. Hence,the auditorshould carefully examine the management integrity in order to judge the credibility of evidence supplied by the management.

To Examine: The various scenarios and to study the negative impact on management integrity the related effect on the audit planning.

Answer 14

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Ch. 7 - Prob. 1CYBK Ch. 7 - Prob. 2CYBK Ch. 7 - Prob. 3CYBK Ch. 7 - Prob. 4CYBK Ch. 7 - Prob. 5CYBK Ch. 7 - Prob. 6CYBK Ch. 7 - Prob. 7CYBK Ch. 7 - Prob. 8CYBK Ch. 7 - Prob. 9CYBK Ch. 7 - Prob. 10CYBK

Introduction: Meaning of Management Integrity is the attitude of management towards Internal Control systems and setting the example to the lower set of employees. To Define: The various possible sources of evidence which may be used by the Auditor to assess the management integrity.

Chapter 7 Solutions

Introduction: Meaning of Management Integrity is the attitude of management towards Internal Control systems and setting the example to the lower set of employees.

To Define: The various possible sources of evidence which may be used by the Auditor to assess the management integrity.