Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 14, Problem 31QRA
a.
To determine
Explain the unrecorded liability that could be discovered in the given case and the
b.
To determine
Explain the unrecorded liability that could be discovered in the given case and the audit procedures for identifying the procedures.
c.
To determine
Explain the unrecorded liability that could be discovered in the given case and the audit procedures for identifying the procedures.
d.
To determine
Explain the unrecorded liability that could be discovered in the given case and the audit procedures for identifying the procedures.
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The preparation of audit documentation is an integral part of an auditor’s examination of financial statements. On a recurring engagement, auditors review the audit plans and audit documentation from the prior audit while planning the current audit to determine their usefulness for the current-year work.Required:a. (1) What are the purposes or functions of audit documentation? (2) What records may be included in audit documentation?b. What factors affect the auditors’ judgment of the type and content of the audit documentation for a particular engagement?c. What should be included in audit documentation to support auditors’ compliance with generally accepted auditing standards?d. How can auditors make the most effective use of the prior-year audit plans in a recurring audit?
Why deos the auditor obtain an understanding of the clients business, enviroment and related risk of the organization?
1. Determine audit opinion that will be issued
2. determine the appropriate understanding of internal controls
3. determine the detection of audit procedures in the period under audit.
4. determine weather the auditor has sufficient knowledge to perform audit.
In the auditing process
Select one:
a.
the criteria for evaluating information will not vary depending on the information being audited.
b. the audit report communicates the auditor's findings to users.
c. the types and amounts of evidence remain constant from audit to audit
d.
evidence are gathered by the auditor to determine whether the audited information is stated in accordance with SEC standards.
Chapter 14 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 14 - If a corporation overstates its earnings, are its...Ch. 14 - Prob. 2RQCh. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - List the major responsibilities of an accounts...Ch. 14 - Prob. 10RQ
Ch. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - Prob. 13RQCh. 14 - Prob. 14RQCh. 14 - Prob. 15RQCh. 14 - Prob. 16RQCh. 14 - Prob. 17RQCh. 14 - Whitehall Company records its liabilities in an...Ch. 14 - Prob. 19RQCh. 14 - Prob. 20RQCh. 14 - Prob. 21RQCh. 14 - Prob. 22RQCh. 14 - What is the purpose of the auditors review of cash...Ch. 14 - Prob. 24RQCh. 14 - Prob. 25RQCh. 14 - Prob. 26RQCh. 14 - Prob. 27QRACh. 14 - Prob. 28QRACh. 14 - Prob. 29QRACh. 14 - Prob. 30QRACh. 14 - Prob. 31QRACh. 14 - Prob. 32QRACh. 14 - Which of the following procedures is least likely...Ch. 14 - Prob. 33BOQCh. 14 - Which of the following is the best audit procedure...Ch. 14 - Prob. 33DOQCh. 14 - Prob. 33EOQCh. 14 - Prob. 33FOQCh. 14 - Prob. 33GOQCh. 14 - Prob. 33HOQCh. 14 - Ordinarily, the most significant assertion...Ch. 14 - Prob. 33JOQCh. 14 - Prob. 33KOQCh. 14 - Prob. 33LOQCh. 14 - Prob. 34OQCh. 14 - Prob. 35OQCh. 14 - Prob. 36OQCh. 14 - Prob. 37OQCh. 14 - Prob. 38PCh. 14 - Prob. 39PCh. 14 - Prob. 40PCh. 14 - Prob. 41PCh. 14 - Prob. 42PCh. 14 - Prob. 43ITC
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- An audit program is usually prepared after establishing the audit strategy and developing the audit plan. The procedures specifically outlined in an audit program are primarily designed to: a. Test all material transactions. b. Gather corroborating evidence. c. Serve as protection of the auditor in case of litigation regarding negligence. d. Detect errors or irregularities.arrow_forwardList the functions needs to be done on the part of auditor to verify contingent liabilities of an company during the process of the audit?arrow_forwardThe auditor is required to prepare audit documentation sufficient to enable an experienced auditor, having no previous connection with the audit, to understand the _________________ in reaching conclusions on significant matters arising during the audit. Select one: a. Confirmation letters b. The interviews conducted with employees and management c. The total evidence gathered d. Significant professional judgements madearrow_forward
- Listed below are several of the auditors’ general objectives in performing substantive procedures on an asset account: Establish the existence of assets. Establish that the company has rights to the assets. Establish the completeness of recorded assets. Verify the cutoff of transactions. Determine the appropriate valuation of the assets. Establish the clerical accuracy of the underlying records. Determine the appropriate financial statement presentation and disclosure of the assets. Required: Indicate the general objective (or objectives) of each of the following audit procedures: a. Observe the client’s physical inventory. b. Locate on the client’s premises a sample of the equipment items listed in the subsidiary plant and equipment ledger. c. Obtain a listing of inventory and reconcile the total to the general ledger. d. Trace a sample of shipping documents to recorded sales transactions. e. Identify related parties. f. Vouch selected purchases of…arrow_forwardthe auditor is planning to use accounts payable confirmations when auditing the client's accounts payable. The use of accounts payable confirmations will test which of the following assertions? a. rights and obligations b. existence (only) c. existence and completeness d. cutoffarrow_forwardWhich of the following procedures is MOST likely to be performed before the balance sheet date? a. Determine the date of the Letter of Representations b. Make a legal determination whether fraud has occurred. c. Search for unrecorded liabilities. d. Confirmation of receivables. e. Updating the predecessor's audit report date.arrow_forward
- Select the necessary words from the list of possibilities to complete the following statements. 1. Working papers of audit interest over an extended period of time should be filed in the is a type of documentary evidence transmitted directly to the auditors by a third party (e.g., a customer or a vender). 2 A 3. A letter signed by officers of the client company at the auditors' request which sets forth certain assertions about the company's financial position and operations is known as a Statements 4 The audit approach of evaluating financial statement information by a study of relationships among financial and nonfinancial data is 5. The term relates to the quantity of evidence that the auditors should obtain. 6. The risk of material misstatement is composed of two risks that the auditor assesses, those risks are inherent risk and risk. 7. The auditors develop client's accounting records. to recommend to management to correct the effects of errors or fraud in the 8. The amount of…arrow_forwardAs part of the audit of different audit areas, auditors should bealert for the possibility of unrecorded liabilities. For each of the following audit areas oraccounts, describe a liability that can be uncovered and the audit procedures that canuncover it:a. Minutes of the board of directors meetings e. Cash surrender value of life insuranceb. Land and buildings f. Cash in the bankc. Rent expense g. Officers’ travel and entertainmentd. Interest expense expensesarrow_forwardAudit standards require auditors to _______. conduct specific audit procedures to identify subsequent events that may occur up through the date of the auditor’s report conduct specific audit procedures to identify subsequent events that may occur after the date of the auditor’s report. apply optional use of analytical procedures to increase assurance levels related to subsequent events delegate auditing of subsequent events to the internal audit function A compilation engagement is _______. an audit of the financial statements, whereby an auditor expresses an opinion on the financial statements an audit of the system of internal control, whereby an auditor expresses an opinion on the system of internal control when an accounting firm assists management in the presentation of financial statements but does not audit, review, nor provide assurance as to whether the financial statements are presented fairly. when an audit firm assists management in the presentation of financial…arrow_forward
- For each of the general audit procedures of (1) recalculation, (b) observation, (c) confirmation (accounts receivable, securities, or other assets),(d) inquiry, (e) inspection of internal documents, (f) recalculation, (g) reperformance, and (h) analytical procedures, Discuss one way the procedure could be misapplied or the auditorscould be misled in such a way as to render the work (audit evidence) misleading or irrelevant.arrow_forwardWhich of the following types of documentary evidence should the auditor consider to be the most reliable? Select one: a. A sales invoice issued by the client and supported by a delivery receipt from an outside trucker. b. Confirmation of an account payable balance mailed by and returned directly to the auditor c. An audit schedule prepared by the client’s controller and reviewed by the client’s treasurer. d. A check, issued by the company and bearing the payee’s endorsement, that is included with the bank statements mailed directly to the auditorarrow_forwardIn auditing, ____________ is the process of identifying and assessing the risks of material misstatement in the financial statements, allowing auditors to tailor their audit procedures accordingly.arrow_forward
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