Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 2, Problem 12RQ
To determine
Explain the extent of the auditing procedures included in the audit while issuing a standard audit report.
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You were recently hired by the CPA firm Honson & Hansen. Before you start working, the firm requires that you participate in the
first-year staff training course. The instructor asks you to prepare answers for the following questions:
a. How is audit evidence defined?
b. How is the collection of audit evidence related to management assertions?
c. What are the two key characteristics of audit evidence that an auditor must consider when evaluating the quality of
the evidence? Describe the meaning of each of these characteristics in the context of auditing.
In order to help the audit team assigned to the audit of a major client's property, plant and equipment accounts better
understand the link between auditing assertions and this area of the audit, the audit manager with overall responsibility for
this part of the audit has convened a meeting. Which of the choices below would be the supervisor's best response to help
explain this relationship? The easiest way to understand this relationship is to imagine taking our list of assertions,
determining which ones apply to the client's property, plant and equipment accounts, and then finding ways to test the
assertions we selected. For example, we might decide to test the valuation and allocation assertion by examining
documents to see if the client has defaulted on any debt associated with these assets. The easiest way to understand this
relationship is to imagine taking our list of assertions, determining which ones apply to the client's property, plant and
equipment accounts, and then…
My question is on auditing where I want to know whether the audit evidence is sufficient and appropriate such as oral representation by management, year end suppliers statement and physical inspection of a non current assets
Chapter 2 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 9RQCh. 2 - Prob. 10RQ
Ch. 2 - Prob. 11RQCh. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Prob. 14RQCh. 2 - Prob. 15RQCh. 2 - Prob. 16RQCh. 2 - Prob. 17RQCh. 2 - Prob. 18RQCh. 2 - Prob. 19RQCh. 2 - Prob. 20RQCh. 2 - Prob. 21RQCh. 2 - Prob. 22RQCh. 2 - Prob. 23RQCh. 2 - Prob. 24RQCh. 2 - Prob. 25QRACh. 2 - Prob. 26QRACh. 2 - Jane Lee, a director of a nonpublic corporation...Ch. 2 - Prob. 28QRACh. 2 - Prob. 29QRACh. 2 - Prob. 30AOQCh. 2 - Prob. 30BOQCh. 2 - Prob. 30COQCh. 2 - Prob. 30DOQCh. 2 - Prob. 30EOQCh. 2 - Prob. 30FOQCh. 2 - Prob. 30GOQCh. 2 - Prob. 30HOQCh. 2 - Prob. 30IOQCh. 2 - Prob. 30JOQCh. 2 - Prob. 30KOQCh. 2 - Prob. 30LOQCh. 2 - Prob. 31OQCh. 2 - Prob. 32OQCh. 2 - Prob. 33OQCh. 2 - Prob. 34OQCh. 2 - Prob. 35OQCh. 2 - Joe Rezzo, a college student majoring in...Ch. 2 - Prob. 37PCh. 2 - Hide-It (HI), a family-owned business based in...Ch. 2 - Prob. 39RDC
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- During the most recent year's audit of Hoover Enterprises, senior management has advised the auditors that a new and more effective system of internal control has been designed and implemented by external consultants and the internal audit function. As a result of this information, what approach might the auditing firm take with respect to internal control? O The external auditors will be required to obtain written assurances from senior management, documenting the effectiveness of the new system of internal control, for inclusion in the audit file. O The auditor is likely to proceed with testing of the new controls, and if the new system is determined to be robust and effective, the auditor will issue a qualified opinion on internal control. O The auditor may presume that their previous understanding of internal control is no longer valid, and will likely amend audit procedures to document the effectiveness of the new system. O The external auditors will focus the audit time and…arrow_forwarda) What are key audit matters? How do these affect the format of the audit report? b) Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing a report for his audit partner based on these results and will be attending a meeting tomorrow with the partner and representatives of the company to discuss them. The issue will be whether the financial report should be amended, or additional notes included for these subsequent events.Many of the items are not material and Stewart will recommend that no action be taken with respect to these. However, there are several items that Stewart believes are material and should be discussed at the meeting. These are as follows.(i) The board is planning to issue shares in a private placement on 15 August. (ii) The share issue is to fund the purchase of a 60 per cent stake in another company. The negotiations are in the final stages and although the contract is not yet signed it will be signedby 15 August.(iii)…arrow_forwardImagine that you are a senior auditor and your firm has been selected to audit a medium-sized company with a single location. Describe the four phases of an audit and discuss the key factors that would help you determine how to plan the audit for this company. Provide specific examples. Determine both the relationship of risks in the planning of the audit and factors that influence those risks. Speculate on which type of risk creates the most uncertainty for the auditor and recommend at least two ways to plan the audit to mitigate those risks. Provide specific examples.arrow_forward
- Question: Assume that you are an auditor of a company. Explain any THREE categories of assertions that you will be testing when auditing the financial statements of the company. You are required to: (ii.) with proper justification and two sample transactions.arrow_forward1) You are running an audit firm at muscat and you are appointed as the auditor of Assarain Furnishing LLC, which is a leading supplyier of furnitures across the Gulf. You are provided with its financial statement for the year 2021 for conducting audit. Answer the following questions based on the same. a) Discuss the procedures to be followed by you at the time of examining the evidences? b) How can you ensure the reliability of audit evidences?arrow_forwardYou have been appointed as an external auditor of XYZ Textile Limited and completed the audit. You did not find any material misstatement in financial statements of the XYZ TextileLtd. You are required to write audit reportarrow_forward
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