PRINCIPLES OF AUDITING & OTHER ASSURANC
21st Edition
ISBN: 9781264007202
Author: WHITTINGTON
Publisher: MCG
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Chapter 1, Problem 30OQ
To determine
Classify the given phrases into two given groups.
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Explain one way the external auditor's responsibilities regarding a public company's system of internal controls have changed since SAS 78 became effective in the late 1990s. Were these changes necessary? Do you believe the changes have been effective at reducing risk for the company and the users of the financial statements? Explain your rationale.
The main purpose of the auditor's consideration of internal control for a non-SEC client is to
A. Develop suggestions for improvements in internal control.
C. timing Determine the nature, timing, and extent of substantive tests.
C. Express an opinion on the
financial statements.
D. Determine whether fraud has occurred during the year under audit.
**Objective Question:** Which type of audit primarily focuses on ensuring that an organization
complies with relevant laws, regulations, and internal policies? A) External audit B) Tax audit C)
Compliance audit D) Forensic audit
Chapter 1 Solutions
PRINCIPLES OF AUDITING & OTHER ASSURANC
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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Similar questions
- 7) Compare and contrast between external audit and internal audit in the public sector. 8)The scope of public sector audit extends beyond that of private sector audit in a number of ways'. Discuss this statement. 9)Find the latest available Audit Report published on the website of the National Audit Department. Identify one issue raised by the Auditor General. Discuss this issue in class. You can use either Audit Report for Federal Government or any of the State governments. 1o) Identify international organisations related to audit in the public sector and briefly describe their functionsarrow_forward13. When auditing an entity's financial statements in accordance with Government Auditing Standards (the "Yellow Book"), an auditor is required to report on: I. Recommendations for actions to improve operations. II. The scope of the auditor's tests of compliance with laws and regulations. Group of answer choices I only. II only. Both I and II. Neither I nor II.arrow_forwardGovernmental auditors’ independence and objectivity are enhanced when they report theresults of an audit assignment directly toa. Managers of the government agency under audit and in which the auditors are employed.b. The audit committee of directors of the agency under audit.c. Political action committees of which they are members.d. The congressional committee that ordered the audit.arrow_forward
- An organization’s board of directors has recently experienced a substantial change in leadership. The new members of the board have demanded an external audit for internal control and information assurance. What should the president or leader of the organization be prepared to provide to ensure the board is comfortable with the audit results?arrow_forwardQUESTION (AUDITING) 1. Briefly explain with five reasons why auditors are needed in society?2. Mention, a few characteristics that are important for an auditor to have?3. Identify and briefly discuss the inherent limitations of an audit of the set of annual financial statements of a company?arrow_forwardWhich of the following BEST (select one) describes why auditing can be viewed as a continuous cyclical process? a) The audit plan is used to develop the audit schedule. b) Many audit departments review the same areas each year as part of the audit plan. c) Historical and current information from audits should be incorporated into the risk assessment. d) Businesses go through economic cycles, so audit plans must go through cycles.arrow_forward
- Operational auditing has grown in importance over the last few decades. a. Define operational auditing. b. Who are the major users of operational audit reports. c. List the phases of an operational audit.arrow_forward23. Which of the following best describes the scope of internal auditing as it has developed to date? Group of answer choices Internal auditing involves appraising the economy and efficiency with which resources are employed Internal auditing involves evaluating compliance with policies, plans, procedures, laws, and regulations Internal auditing has evolved to verifying the existence of assets and reviewing the means of safeguarding assets Internal auditing has evolved to more of an operational orientation from a financial orientationarrow_forwardWhich of the following is not true about the major differences in the scope of audit responsibilities for CPAS, GAO auditors, IRS agents, and internal auditors? CPAS perform audits of financial statements of private and public companies (A) prepared in accordance with U.S. or international auditing standards. GAO auditors perform compliance or operational audits in order to assure the B government of the expenditure of public funds in accordance with its directives and the law. IRS agents perform compliance audits to enforce the federal tax laws as defined by the government, interpreted by the courts, and regulated by the IRS. Internal auditors perform compliance or operational audits in order to assure management or the board of directors that controls and policies are properly and consistently developed, applied, and evaluated.arrow_forward
- 37. Which of the following best describes the scope of internal auditing as it has developed to date? Group of answer choices Internal auditing involves evaluating compliance with policies, plans, procedures, laws, and regulations Internal auditing has evolved to verifying the existence of assets and reviewing the means of safeguarding assets Internal auditing involves appraising the economy and efficiency with which resources are employed Internal auditing has evolved to more of an operational orientation from a financial orientationarrow_forwardConsider each of the following independent situations which have come to your attention. In each of the following independent and material situations assume that the client is a reporting entity and that a general-purpose financial report has been prepared and audited: Event 1: Part of Steel Limited's operations are in South America. Recent changes of government have made it impossible for you to verify the key accounts of inventory, fixed assets and cash and related income statement balances. (50 -80 words) Event 2: The management of Surf Limited's has refused to disclose a few, director related transactions on the grounds of commercial confidentiality. The financial controller reminds you that no other errors have been found in the financial report and states that the transactions are immaterial and therefore irrelevant to the users of the financial report. (50 -80 words) Event 3: The annual report of Ranger Limited includes a detailed graph showing revenue for the last 10 years.…arrow_forwardAnalytical procedures are an important part of the audit process and consist of the evaluation of financial information by the study of plausible relationships among financial and nonfinancial data. Analytical procedures may be done during planning, as a substantive test, or as a part of the overall review of an audit. The following are various statements regarding the use of analytical procedures: Should focus on enhancing the auditor’s understanding of the client’s business and the transactions and events that have occurred since the last audit date Should focus on identifying areas that may represent specific risks relevant to the audit Require documentation in the working papers of the auditor’s expectation of the ratio or account balance Generally use data aggregated at a lower level than the other stages Should include reading the financial statements and notes to consider the adequacy of evidence gathered Not required during this stage Involve reconciliation of…arrow_forward
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