International Accounting
5th Edition
ISBN: 9781259747984
Author: Doupnik, Timothy S., Finn, Mark T., Gotti, Giorgio
Publisher: Mcgraw-hill Education,
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Chapter 11, Problem 9EP
To determine
Explain the role that PCAOB (Public Company Accounting Oversight Board) can play in strengthening the role of auditors. Also, list the two key steps taken by PCAOB in this regard.
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‘To stall the rot in the public sector in Ghana, more value must be placed on the work of the internal auditors, than on the assurance works of external auditors including the Audit Service of Ghana’. Do you agree with this assertion? Support your answer with relevant considerations with the legal framework that governs the public sector accountability.
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.
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 orientation
Chapter 11 Solutions
International Accounting
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- 23. 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_forwardDiscuss why we have a dual system of auditing standards in the U.S. (AICPA Auditing Standards Committee-Statement on Auditing Standards and the PCAOB-Auditing Standards). Be certain to identify when each system used.arrow_forward1. Please explain main points of Docket 046: Quality Control (PCAOB). 2. What is/was the major focus of that standard - setting project concerning standard - setting activity? 3. Why does the subject matter to accountants and auditors in the future? 4. What was the result or conclusion reached (if the standard has been issued already), or what seems to be the main direction of the standard - setting project as of the date you reviewed it? 5. How might practitioners apply the article's recommendations or strategies in the real world of the auditing profession?arrow_forward
- Refer 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?arrow_forward1.) The Information Systems Audit and Control Association (ISACA) developed guidelines and procedures on how to follow the standards that apply specifically to the specialized nature of the IS Audit. The guidelines serve as guidance the IS auditor should normally follow. However, there may be situations where the auditor will not follow that guidance. In this case, what happens now to the work done by the IS auditor? 2.) Audits are conducted for various reasons. It can help an organization ensure effective operations, affirm its compliance with various regulations, and confirm that the business is functioning well and is prepared to meet potential challenges. There are three typical phases in an Audit, explain each phase and its relation to the other.arrow_forwardIFMIS has been instrumental in prudent and transparent use of public resources through increased visibility of financial transactions by the Government. It has also made it possible for integration with other government agencies hence enabling cross referencing of data which has greatly reduced any opportunities for fraud. Discuss the benefits and threats of advancements in communications technology on this essential government accounting systems for disbursing funds. 2. With your knowledge of AIS what are the controls and mitigation measures to avertarrow_forward
- 1.) The Information Systems Audit and Control Association (ISACA) developed guidelines and procedures on how to follow the standards that apply specifically to the specialized nature of the IS Audit. The guidelines serve as guidance the IS auditor should normally follow. However, there may be situations where the auditor will not follow that guidance. In this case, what happens now to the work done by the IS auditor? 2.) Audits are conducted for various reasons. It can help an organization ensure effective operations, affirm its compliance with various regulations, and confirm that the business is functioning well and is prepared to meet potential challenges. There are three typical phases in an Audit, explain each phase and its relation to the other. 3.) Every organization has controls in place. Such controls must be effective. They are effective if they prevent, detect, or contain incidents and enable recovery from events that cause risks. Enumerate those three types of control…arrow_forwardWhich of the following expressions best describes a situation under which the issuance of a report that concludes on the condition of the internal controls of an organization that provides technological services to one of our audit clients (SOC report) is required? It is that situation in which a CPA has been hired to evaluate a. the projected financial statements prepared by the client, to see if the expected results comply with hypothetical assumptions or not. b. the information systems and technologies subcontracted by the client, specifically in what corresponds to criteria of security, availability, integrity, confidentiality and privacy. c. any assertion or area that the client has asked to intervene (subject matter), and do so in accordance with compliance or not, with criteria or principles (against criteria). d. services that help the client maintain their financial independence.arrow_forwardIn this section, we will discuss the numerous alternatives for putting an internal audit function inside a company and the associated benefits and drawbacks for each recognized option. What are the most important considerations for building a successful internal audit function in an organization?arrow_forward
- In recent years the move by accounting firms to offshore tax and consulting work has grown and expanded into audit work. What are the ethical concerns that might be raised about the practice of electronically transmitting audit information to offshore centers like those in India that provide accounting professionals to audit U.S. corporations’ financial statements?arrow_forwardWhich of the following is the least important consideration for a governmental auditor whoneeds to be objective when auditing and reporting on an agency’s achievement of programgoals?a. Measure the actual output results of agency activities.b. Compare the agency’s actual output results to quantitative goal standards.c. Perform a comprehensive review of management controls.d. Determine quantitative standards that describe goals the agency was supposed to achieve.arrow_forwarddistinguish between audit, attest, and assurance services. What is GAAS? Which agency is responsible to set these standards in the U.S.?arrow_forward
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