Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 13, Problem 31DQP
(a).
To determine
Match engagements with descriptions
(b).
To determine
Determine the factors that can explain the different approaches to the audit of acquisitions and payments and accounts payable for the three engagements.
(c).
To determine
Determine how Person A’s supervision could improve her understanding of the audit strategy for each engagement.
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The following are parts of a typical audit for a company with a fiscal year end of July 31.
Set acceptable audit risk and decide preliminary judgment about materiality and performance materiality.
Understand internal control and assess control risk.
Perform substantive analytical procedures for accounts payable.
Confirm accounts payable.
Perform tests of controls and substantive tests of transactions for the acquisition and payment and payroll and personnel cycles.
Perform other tests of details of balances for accounts payable.
Perform tests for review of subsequent events.
Accept the client.
Issue the audit report.
Required
Identify the phase of the audit in which each activity occurs.
Put parts 1 through 9 of the audit in the sequential order in which you would expect them to be performed in a typical audit.
Identify those parts that will frequently be done before July 31.
ABC Manufactures is a manufacturing company, and your audit team is conducting the annual audit of its financial statements. As part of the audit procedures, you are tasked with testing the accounts receivable balance. ABC Manufactures has a significant accounts receivable balance owing to its diverse customer base. Upon initiating the audit procedures, your team sends out accounts receivable confirmations to one of ABC Manufactures largest customers with a material accounts receivable balance outstanding. However, several weeks have passed, and the confirmation has not been returned. The audit team has made follow-up attempts via phone calls and emails, but there has been minimal response. Considering the lack of responsiveness, the audit team is becoming increasingly skeptical about the effectiveness of the confirmation process in this particular situation. Describe two alternative audit procedures that the audit team may conduct that may assist them in gathering sufficient…
(J) Kim Bryan, a new staff auditor, is confused by the inconsistency of the three audit partners to whom she has been assigned on her first three audit engagements. On the first engagement, she spent a considerable amount of time in the audit of cash disbursements by examining cancelled cheques and supporting documentation, but almost no time was spent on the verification of property, plant, and equipment. On the second engagement, a different partner had her do less intensive tests in the cash disbursements area and take smaller sample sizes than in the first audit even though the company was much larger. On her most recent engagement under a third audit partner, there was a thorough test of cash disbursement transactions, far beyond that of the other two audits, and an extensive verification of property, plant, and equipment. In fact, this partner insisted on a complete physical examination of all property, plant, and equipment recorded on the books. The total audit time on the most…
Chapter 13 Solutions
Auditing And Assurance Services
Ch. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Explain how the calculation and comparison to...Ch. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - For each of the eight types of evidence discussed...
Ch. 13 - Prob. 11RQCh. 13 - Prob. 12RQCh. 13 - Prob. 13RQCh. 13 - Prob. 14RQCh. 13 - Prob. 15RQCh. 13 - Prob. 16RQCh. 13 - Prob. 17RQCh. 13 - Prob. 18RQCh. 13 - Prob. 19RQCh. 13 - Prob. 20RQCh. 13 - Prob. 21.1MCQCh. 13 - Prob. 21.2MCQCh. 13 - A conceptually logical approach to the auditors...Ch. 13 - Prob. 22.1MCQCh. 13 - Prob. 22.2MCQCh. 13 - Prob. 22.3MCQCh. 13 - Prob. 23.1MCQCh. 13 - b. Substantive analytical procedures are most...Ch. 13 - Prob. 23.3MCQCh. 13 - Prob. 24DQPCh. 13 - Prob. 25DQPCh. 13 - Prob. 26DQPCh. 13 - Prob. 27DQPCh. 13 - Prob. 28DQPCh. 13 - Prob. 29DQPCh. 13 - Prob. 30DQPCh. 13 - Prob. 31DQPCh. 13 - Prob. 32DQPCh. 13 - Prob. 33DQPCh. 13 - Prob. 34DQPCh. 13 - Prob. 35DQP
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