Introduction:The risk associated with the overall operations of a business entity is called as the potential risk. It is the risk of undesirable outcomes resulting from the hazards. So an auditor as a consultant is required for risk management, who recommend some business strategy and necessary changes.
Requirement 1
Potential risk areas and the cause they represent potential risks
Introduction: The risk associated with the overall operations of a business entity is called as the potential risk. It is the risk of undesirable outcomes resulting from the hazards. So an auditor as a consultant is required for risk management, who recommend some business strategy and necessary changes.
Requirement 2
The possible explanations for representing potential risk
Introduction:To determine the quality of financial information that are provided by the clients,
Requirement 3
the accuracy of client’s data in Audit procedures
Introduction:In business practice, sometimes there may be involve altering accounts receivables to embezzlement of cash. To conceal such amount is a fraudulent activity known as lapping scheme. This method involves considering subsequent receivables payment from a transaction and uses that to cover the embezzlement of cash.
Requirement 4
the way that the CFO use
Introduction: Professional skepticism is a foundation of auditing profession. It always uses validate information through critical assessment of evidence. This skepticism must be applied at each stages of audit process.
Requirement 5
The importance of professional skepticism during performing planning analytical procedures
Want to see the full answer?
Check out a sample textbook solutionChapter 9 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
- Do fast answer of this question solution general accountingarrow_forwardPart 1: How does business model evolution affect accounting adaptation? a) Changing operations require modified recording approaches b) Traditional methods fit forever c) Evolution creates problems d) Standard rules never change Part 2: How do pre-opening costs affect new branch office accounting? a) Capitalize until opening b) Add to goodwill c) Defer and amortize d) Expense as incurred Part 3: Elle Corporation has the following standards for its direct materials: 1. Standard Cost: $3.80 per pound 2. Standard Quantity: 6.00 pounds per product. During the most recent month, the company purchased and used 33,900 pounds of material in manufacturing 5,600 products, at a total cost of $131,900. Compute the materials quantity variance. Part 4: Discuss the implications of the revenue recognition principle on the reporting of long-term contracts or projects that span multiple accounting periods. What challenges do accountants face in ensuring the faithful representation of a company's…arrow_forwardQuick answer of this accounting questionsarrow_forward
- Can you please answer the general accounting question?arrow_forwardThe actual cost of direct materials is $55.75 per pound. The standard cost per pound is $60.50. During the current period, 6,100 pounds were used in production. The standard quantity for actual units produced is 5,700 pounds. How much is the direct materials price variance? A. $27,075 unfavorable B. $28,975 unfavorable C. $28,975 favorable D. $27,075 favorablearrow_forwardgeneral accountarrow_forward
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning