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.