Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 1, Problem 37P
a.
To determine
Explain the objective of an independent audit.
b.
To determine
Define the five benefits of an independent audit.
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Feller, the sole owner of a small hardware business, has been told that the business should have its financial statements audited by an independent CPA. Feller, having some bookkeeping experience, has personally prepared the company’s financial statements and does not understand why such statements should be audited by a CPA. Feller discussed the matter with Farber, a CPA, and asked Farber to explain why an audit is considered important.
a. Describe the objectives of an independent audit
b. Identify five ways in which an independent audit may be beneficial to Feller
Juan Dela Cruz has been asked to accept an engagement to audit a small financial institution. Juan Dela Cruz has not been previously audited a financial institution.
Required:
Describe the types of knowledge about the prospective client and its industry that Juan Dela Cruz must obtain to plan the engagement
Explain how Juan Dela Cruz may obtain this knowledge
Discuss how this knowledge of the client’s business and industry will help Juan Dela Cruz in planning and performing an audit in accordance with auditing standards.
Victoria Lilly is a practicing CPA. A long-time audit client has asked Lilly to design and implement a computer-based accounting information system. The fees associated with this opportunity are very attractive. However, Victoria is concerned that she will not be able to maintain objectivity in future financial statement audits if she was responsible for the design and implementation of the client's accounting system. Furthermore, Victoria knows that professional standards require her to remain independent in "fact" and "appearance" from her auditing clients.1. In regards to financial statement audits, what is the difference between independence in "fact" and independence in "appearance"?2. Why do professional standards require that an auditor remain independent of their audit clients?3. Do you believe that Victoria can accept the engagement to develop the client's accounting system and still remain independent? (Support your answer)
Chapter 1 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 8RQCh. 1 - Prob. 9RQCh. 1 - Prob. 10RQ
Ch. 1 - Prob. 11RQCh. 1 - Prob. 12RQCh. 1 - Describe briefly the function of the GAO.Ch. 1 - Prob. 14RQCh. 1 - Prob. 15RQCh. 1 - Prob. 16RQCh. 1 - Prob. 17RQCh. 1 - Prob. 18RQCh. 1 - Prob. 19RQCh. 1 - Prob. 20RQCh. 1 - Prob. 21RQCh. 1 - Prob. 22RQCh. 1 - What characteristics make an accounting...Ch. 1 - Prob. 24RQCh. 1 - Prob. 25QRACh. 1 - A corporation is contemplating issuing debenture...Ch. 1 - Prob. 27QRACh. 1 - Prob. 28QRACh. 1 - Prob. 29AOQCh. 1 - Prob. 29BOQCh. 1 - Prob. 29COQCh. 1 - Prob. 29DOQCh. 1 - Prob. 29EOQCh. 1 - Prob. 29FOQCh. 1 - Prob. 29GOQCh. 1 - Which of the following did not precipitate the...Ch. 1 - Prob. 29IOQCh. 1 - Prob. 29JOQCh. 1 - Prob. 29KOQCh. 1 - Prob. 29LOQCh. 1 - Prob. 30OQCh. 1 - Prob. 31OQCh. 1 - Prob. 32OQCh. 1 - Prob. 33OQCh. 1 - Prob. 34OQCh. 1 - Prob. 35OQCh. 1 - Prob. 36OQCh. 1 - Prob. 37PCh. 1 - Prob. 38PCh. 1 - Will Williams, a college senior, has begun the...Ch. 1 - Smith Co., a local Dallas public accounting firm,...
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