Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 18, Problem 31QRA
a.
To determine
Explain the steps taken by Company A to engage CPA firm to issue a report indicating that the weakness no longer exists.
b.
To determine
Explain the process of approaching the engagement that should be taken by the CPA firm.
c.
To determine
Provide approach of the auditor if the member of the audit team finds out another weakness in the control after the appointment of the new controller. Provide the effect on the audit report.
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The CPA firm of Webster, Warren, & Webb LLP issued an adverse opinion on the internal control of Alexandria Financial, a public company, due to a material weakness. The weakness involved the lack of sufficient accounting expertise to evaluate and adopt appropriate accounting principles. Subsequent to issuance of the report, management of Alexandria hired a new controller to eliminate the weakness.
a. Describe what steps Alexandria must perform to engage Webster, Warren, & Webb to issue a report indicating that the weakness no longer exists.
b. Describe how Webster, Warren, & Webb should approach the engagement.
c. Describe what Webster, Warren, & Webb must do if, during the course of the engagement, a member of the audit team discovers another material weakness in internal control over financial reporting. Will the new weakness affect the auditors’ report?
Which of the following statements is/are correct?
O a. The ban on simultaneously offering consulting and auditing services to economically relevant companies within the framework of the FISG results from the bad experiences that BaFin
had with corresponding offers in the context of the Wirecard scandal.
O b. Violations of the so-called "blacklist" lead to significant fines being paid by the auditing company.
Oc. According to the Financial Market Integrity Strengthening Act, companies are obliged to set up an audit committee to monitor the quality of the audit.
O d. The external rotation of auditing firms requires more frequent tendering processes for auditing services.
Each of the following statements is a communication from management. Indicate whether the inclusion of each statement in written representations is appropriate. Provide your rationale for any statements whose inclusion in written representations is not appropriate.a. “Certain representations in this letter are described as being limited to matters that are material.”b. “No frauds involving management, employees who have significant roles in internal control, or other frauds that could have a material effect on the financial statements have occurred during the year under audit.”c. “Based on our assessment, we conclude that the Company has maintained an effective internal control over financial reporting as of December 31, 2017.”
d. “We have prepared a description and evaluation of certain contingencies for which our attorneys have devoted substantive attention on our behalf in the form of legal representation.”e. “There are no significant deficiencies, including material weaknesses, in…
Chapter 18 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 18 - Prob. 1RQCh. 18 - Prob. 2RQCh. 18 - Prob. 3RQCh. 18 - Prob. 4RQCh. 18 - Prob. 5RQCh. 18 - Prob. 6RQCh. 18 - Prob. 7RQCh. 18 - Prob. 8RQCh. 18 - Prob. 9RQCh. 18 - Prob. 10RQ
Ch. 18 - Prob. 11RQCh. 18 - Prob. 12RQCh. 18 - Prob. 13RQCh. 18 - Prob. 14RQCh. 18 - Prob. 15RQCh. 18 - Prob. 16RQCh. 18 - Prob. 17RQCh. 18 - Prob. 18RQCh. 18 - Prob. 19RQCh. 18 - Prob. 20RQCh. 18 - Prob. 21RQCh. 18 - Prob. 22RQCh. 18 - Prob. 23RQCh. 18 - Prob. 24RQCh. 18 - Prob. 25RQCh. 18 - Prob. 26RQCh. 18 - Prob. 27RQCh. 18 - Prob. 28RQCh. 18 - Prob. 29QRACh. 18 - Prob. 30QRACh. 18 - Prob. 31QRACh. 18 - Prob. 32AOQCh. 18 - Prob. 32BOQCh. 18 - Prob. 32COQCh. 18 - Prob. 32DOQCh. 18 - Prob. 32EOQCh. 18 - Prob. 32FOQCh. 18 - Prob. 32GOQCh. 18 - Prob. 32HOQCh. 18 - Prob. 32IOQCh. 18 - Prob. 32JOQCh. 18 - Prob. 32KOQCh. 18 - Prob. 32LOQCh. 18 - Prob. 33OQCh. 18 - Prob. 34OQCh. 18 - Prob. 35OQCh. 18 - Match the following definitions (or partial...Ch. 18 - Prob. 37PCh. 18 - Prob. 38ITC
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