A lead audit engagement partner has been providing audit service to the same non-PIE audit client for the last 10 years. What type of threat to independence might this create? Intimidation Self-review Familiarity Advocacy
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- LetGrade SAOG has been audited by the same auditor for over 10 years and the auditor regularly plays football with the CEO and CFO of LetGrade SAOG. The auditor may have become well known with the client(LetGrade SAOG) and, thus, lack objectivity in their work.Which threat may occur in this case Familiarity threats Self-review threats Self-interest threats Advocacy threatsLetGrade SAOG has been audited by the same auditor for over 10 years and the auditor regularly plays football with the CEO and CFO of LetGrade SAOG. The auditor may have become well known with the client(LetGrade SAOG) and, thus, lack objectivity in their work.Which threat may occur in this case Familiarity threats Self-interest threats Self-review threats Advocacy threatsRefer to Exhibit 2.5 and answer the following questions. a. (Sections 101, 104, and 105) How does the establishment and operation of the PCAOB help to ensure quality external audits? How will audit firm inspections and investigations by the PCAOB help ensure high audit quality? b. (Sections 201-203) How do Sections 201-203 address audit ()r independence concerns? c. (Section 206) What is a cooling-off period, and how does it address auditor independence concerns? d. (Section 301) How do the audit committee requirements help ensure effective corporate governance? e. (Sections 302 and 906) How do the officer certification requirements help to address the risk of fraud in publicly traded organizations? What is the likelihood that a CFO who is committing fraudulent financial reporting would sign the certification falsely, and what are your reactions to that possibility? f. (Section 401) How does this section relate to the Enron fraud? g. (Section 404) How do the management assessment and audit or attestation of internal controls contained in this section help to address the risk of fraud in publicly traded organizations? h. (Section 407) Why is it important that at least one member of the audit committee be a financial expert? What are the financial reporting implications if the audit committee does not have any individuals serving on it who possess financial expertise? i. (Section 802) How does this section relate to the Enron fraud?
- Critically evaluate how the breach of ethics by auditors could contribute to expand the audit expectation gap. Your report should include/address the following concerns: 1. Introduce/analyze ethical aspect of auditors and audit expectation gap. 2. Critically examine how different threats to ethics enlarge the audit expectation gap. 3. Propose ways to minimize the threats to ethics and thus the expectation gap of audits. 4. Determine the current developments and future direction of ethical aspects of auditors, and explain how such developments contribute to safeguard the audit profession as a concluding remarks. Include a cover page, an executive summary, a table of contents and references. You may include an appendix if necessary.The audit firm is acting as an expert witness directly for the audit client. What type of threat to independence might this create? Intimidation Self-interest Advocacy Familiarity.Address the questions in perspective of auditing 1. How can internal auditors use histograms during internal audits? 2. How can management use control charts as part of their ongoing monitoring activities? 3. How can the 5S model be used during an operational audit? 4. How is transporting a waste? Provide an example to support your answer. 5. Describe the impact of defects on organizational success from an internal and external (e.g., competitive) perspective. 6. Describe three reasons why waiting is damaging to organizations. 7. Provide three recommendations to minimize the presence of underutilized employees. 8. Explain the elements of the CCCER/5C model. 9. Explain three methodologies that can help operational auditors find the root cause of operational deficiencies. 10. List three actions that can help to make findings and recommendations more persuasive
- Which of the following are common issues with benchmarking tool used by internal auditors? Benchmarking need face-to-face contact or discussion with other organizations O Benchmarking information is often proprietary and organizations are reluctant to share it with other organizations. Benchmarking can show areas of excellence within the organization but internal audits should focus on exception-based reporting O Typical metrics used in benchmarking are time, quality, and costYour audit client, Beacon Ltd has proposed that your audit firm take up a consultancy project to evaluate several possible new accounting system, and provide advice on which system should be selected, as well as oversee the installation of the new system. Which of the following threats would be created if the consultancy project proposed by Beacon Ltd is accepted by your audit firm? Question 6 options: 1) Advocacy 2) Familiarity 3) Self-review 4) IntimidationPermanent files serve as handy reference source for new staff members in acquainting themselves with the client and for more experienced auditor in planning the current year’s audit. TRUE OR FALSE? WHY?
- Which of the following actions would be considered as self-interest threats? Select which two options are correct. Select one or more: A. A member of the assurance team is a director of the client. B. An auditor acts as an advocate on behalf of an assurance client. C. An auditor has potential employment with an assurance client. D. One client provides a high percentage of total audit fees.Supervision and review are essential parts of managing an engagement. When the auditor obtains audit evidence about the operating effectiveness of controls during an interim period, that is enough to support reliance to reduce substantive procedures to be performed at year-end. Group of answer choices True, False True, True False, True False, FalseThe acceptable audit risk for the financial statements overall tends to be low and is set by the auditor at the beginning of the audit. How low audit risk is set is impacted by which of the following factors? (Several choices may be correct.) OG. Whether the entity has a strong tone at the top OC. The risk the client may no longer continue to be a going concern OB. The number of users relying on the financial statements O E. Past issues with management integrity O A. The attitude of the organization toward controls O F. Expansion of the client into new markets OD. Changes to the industry in which the client operates