
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 accounts receivable and inventory
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

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Chapter 9 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
- please help me create a balance sheet and expalin (a) Lisa invested cash by making a deposit in a bank account for the business, $9,000. (b) Paid rent for July, $150. (c) Purchased a used van for cash, $5,000. (d) Purchased a laptop computer (Computer Equipment) on account for, $500. (e) Purchased cleaning supplies that cost $200. Paid $100 cash and will pay the balance next month, $100. (f) Paid part-time assistant (Salaries and Wages expense) for first half of month, $100. (g) Paid for advertising, $90. (h) Paid two-year premium for liability insurance on van, $480. (i) Received cash from clients for services performed, $800. (j) Performed cleaning services for clients on account, $500. (k) Paid phone bill, $40. (l) Received cash from clients for window cleaning performed on account in transaction (j), $200. (m) Paid part-time assistant for last half of month, $200. (n) Made partial payment on computer equipment purchased in transaction (d), $200. (o)…arrow_forwardNeed help in this problem can u doarrow_forwardHello tutor i need help in this problemarrow_forward
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
