EBK AUDITING & ASSURANCE SERVICES: A SY
11th Edition
ISBN: 9781260687668
Author: Jr
Publisher: MCGRAW-HILL LEARNING SOLN.(CC)
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Question
Chapter 2, Problem 2.25P
To determine
Introduction:Generally Accepted Auditing Standards are a set of guidelines which are to be followed by the auditors while conducting an audit.
To explain: The four categories of principles underlying an audit conducted in accordance with Generally Accepted Auditing Standards and mention the actions of J that violate these principles.
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The owner of a small company asked a CPA to conduct an audit of the company's records. The owner of the company told the CPA that the audit was to be completed in time to submit audited financial statements to a bank as part of a loan application. The CPA immediately accepted the engagement and agreed to provide an auditor's report within three weeks. The owner agreed to pay the CPA a fixed fee plus a bonus if the load was granted.
The CPA hired two accounting students to conduct the audit and spent several hours telling them exactly what to do. The CPA told the students not to spend time reviewing the internal controls but instead to concentrate on proving the mathematical accuracy of the ledger accounts and summarizing the data in the accounting records that supported the company's financial statements. The students followed the CPA's instructions and after two weeks gave the CPA the financial statements which did not include any footnotes. The CPA reviewed the statements and…
The owner of a small company asked a CPA to conduct an audit of the company's records. The owner of the company told the CPA that the audit was to be completed in time to submit audited financial statements to a bank as part of a loan application. The CPA immediately accepted the engagement and agreed to provide an auditor's report within three weeks. The owner agreed to pay the CPA a fixed fee plus a bonus if the loan was granted.
The CPA hired two accounting students to conduct the audit and spent several hours telling them exactly what to do. The CPA told the students not to spend time reviewing the internal controls but instead to concentrate on proving the mathematical accuracy of the ledger accounts and summarizing the data in the accounting records that supported the company's financial statements. The students followed the CPA's instructions and after two weeks gave the CPA the financial statements which did not include any footnotes. The CPA reviewed the statements and…
Ray, the owner of a small entity, asked Holmes, CPA, to conduct an audit of the entity’s records. Ray told Holmes that the audit was to be completed in time to submit audited financial statements to a bank as part of a loan application. Holmes immediately accepted the engagement and agreed to provide an auditors’ report within three weeks. Ray agreed to pay Holmes a fixed fee plus a bonus if the loan was granted.Holmes hired two accounting students to conduct the audit and spent several hours telling them exactly what to do. Holmes told the students not to spend time reviewing the controls but instead to concentrate on proving the mathematical accuracy of the ledger accounts and on summarizing the data in the accounting records that support Ray’s financial statements. The students followed Holmes’ instructions and, after two weeks, gave Holmes the financial statements, which did not include footnotes. Holmes studied the statements and prepared an unmodified auditors’ report. The…
Chapter 2 Solutions
EBK AUDITING & ASSURANCE SERVICES: A SY
Ch. 2 - Prob. 2.1RQCh. 2 - Prob. 2.2RQCh. 2 - Prob. 2.3RQCh. 2 - Prob. 2.4RQCh. 2 - Prob. 2.5RQCh. 2 - Prob. 2.6RQCh. 2 - Prob. 2.7RQCh. 2 - Prob. 2.8RQCh. 2 - Prob. 2.9RQCh. 2 - Prob. 2.10RQ
Ch. 2 - Prob. 2.11RQCh. 2 - Prob. 2.12RQCh. 2 - Prob. 2.13RQCh. 2 - Prob. 2.14RQCh. 2 - Prob. 2.15MCQCh. 2 - Prob. 2.16MCQCh. 2 - Prob. 2.17MCQCh. 2 - Prob. 2.18MCQCh. 2 - Prob. 2.19MCQCh. 2 - Prob. 2.20MCQCh. 2 - Prob. 2.21MCQCh. 2 - Prob. 2.22MCQCh. 2 - Prob. 2.23MCQCh. 2 - Prob. 2.24PCh. 2 - Prob. 2.25PCh. 2 - Prob. 2.26P
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