Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 22, Problem 26DQP
(a).
To determine
Determine the purpose of each control.
(b).
To determine
Determine the potential financial misstatements that can take place if these controls are not used.
(c).
To determine
Determine
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Students have asked these similar questions
Which of the following can be used as a fundamental source of information in an audit?
a. Money in the safe b. Oral testimony of the person responsible for accounting c. An e-mail from a supplier d. None e. Income statement
PLEASE ANSWER THIS ASAP. THANK YOU SO MUCH.
1.Which of the following statements is incorrect?
a. Management assertions are implied or expressed representations by management about classes of transactions, account balances and presentation and disclosures contained in the financial statements.
b. Transaction cycles may vary from one entity to another and may also be affected by the nature of industry of the client.
c. The primary goal of an auditor in an audit is to issue an opinion that the financial statements of an entity are fairly stated, in all material respects, in accordance with the applicable financial reporting framework.
d. Reasonable assurance is moderate but not absolute level of assurance that the financial statements are free from material misstatements.
2. Which of the following statements does not pertain to responsibilities of management and those in charge of governance?
a. Establish and implement internal controls relevant to the preparation of financial reports.…
5. If an audit firm is giving advice on accounting or control systems and helping the client with calculations of numbers in the Financial Statements, then auditing it. You are required to identify from the following threats to objectivity does the above circumstance gives rise to?
1. Intimidation threat
2. Self-review threat
a.
1 only
b.
Both 1 and 2
c.
Neither 1 nor 2
d.
2 only
Chapter 22 Solutions
Auditing And Assurance Services
Ch. 22 - List four examples of interest-bearing liability...Ch. 22 - Prob. 2RQCh. 22 - Prob. 3RQCh. 22 - Prob. 4RQCh. 22 - Prob. 5RQCh. 22 - Distinguish between (a) tests of controls and...Ch. 22 - Prob. 7RQCh. 22 - Prob. 8RQCh. 22 - Prob. 9RQCh. 22 - Prob. 10RQ
Ch. 22 - Prob. 11RQCh. 22 - Prob. 12RQCh. 22 - Prob. 13RQCh. 22 - Prob. 14RQCh. 22 - Prob. 15RQCh. 22 - Explain the relationship between the audit of...Ch. 22 - Prob. 17.1MCQCh. 22 - Prob. 17.2MCQCh. 22 - Prob. 17.3MCQCh. 22 - Prob. 18.1MCQCh. 22 - Prob. 18.2MCQCh. 22 - Prob. 18.3MCQCh. 22 - Prob. 19.1MCQCh. 22 - Prob. 19.2MCQCh. 22 - Prob. 19.3MCQCh. 22 - Prob. 20DQPCh. 22 - Prob. 21DQPCh. 22 - Prob. 22DQPCh. 22 - Prob. 23DQPCh. 22 - Prob. 24DQPCh. 22 - Prob. 25DQPCh. 22 - Prob. 26DQPCh. 22 - Prob. 27DQPCh. 22 - Prob. 28DQPCh. 22 - Prob. 29DQPCh. 22 - Prob. 30DQP
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Similar questions
- Items 1 through 6 are common questions found in internalcontrol questionnaires used by auditors to obtain an understanding of internal controlfor owners’ equity. In using the questionnaire for a client, a “yes” response indicates apossible internal control, whereas a “no” indicates a potential deficiency.1. Are all entries in the owners’ equity accounts authorized at the proper level in theorganization?2. Are issues and retirements of stock authorized by the board of directors?3. Does the company use the services of an independent registrar or transfer agent?4. If an independent registrar and transfer agent are not used:(a) Are unissued certificates properly controlled?(b) Are cancelled certificates mutilated to prevent their reuse?5. Are common stock master files and stock certificate books periodically reconciledwith the general ledger by an independent person?6. Is an independent transfer agent used for disbursing dividends? If not, is an imprestdividend account maintained?arrow_forwardWhich of the following activities should the internal audit function NOT be involved in?a. Monitoring of management's performanceb. Reviewing adequacy of management information for decision-making purposesc. Taking responsibility for the implementation of a new sales ledger systemd. Assessing compliance with regulation Internal auditors may not perform:a. Audits of financial statements resulting in reports intended for management’s use only.b. Integrated audits leading to an audit opinion issued in accordance with PCAOB standards.c. Forensic audits.d. All of the above. An “integrated audit”, as required by Sarbanes-Oxley Act for U.S. public companies,includes an audit ofa. The company’s internal controlsb. The company’s financial statementsc. The company’s compliance with its rules and policiesd. Both A and B The auditor’s opinions on the effectiveness of internal control over financial reporting (ICFR) in anintegrated audit in accordance with PCAOB AS include the following types…arrow_forwardWhich of the following would assist an entity in cat and prevent fraud? a. Accounting reconciliations b. Segregation of duties c. All the options d. Performance reviewsarrow_forward
- For which of the following purpose can the analytical procedure be used i) Better understanding of the client’s industry and business ii) Assess the client’s ability to continue as going concern iii) To understand the revenue growth, new investments, loans taken etc iv) To understand, if any, abnormal fluctuation in figures in Financial statements v) To reduce the need for detailed audit vi) To understand new changes in internal control environment Only i) , ii) , iii) and iv) Only i) , ii) , iv) and v) Only i) , ii) , iii) , iv) and v) All i) , ii) , iii) , iv) ,v) and vi)arrow_forwardWhich of the following is an attribute of the internal control procedure—assignment of responsibilities? A. The external auditors will monitor internal controls. B. The company should separate the custody of assets from accounting. C. Each position has clearly assigned responsibilities. D. To validate their accounting records, a company should have an audit by an external accountant.arrow_forward1) Why is Responsibility Accounting necessary and how is it implemented? 2) Determination of control risk in the HR cycle (personnel) include an example of the explanation you gave? 3) To design an audit program for testing controls, what stages must the auditor go through when auditing a banking service company?arrow_forward
- Match each of the numbered descriptions 1 through 7 with the term or phrase it best reflects. Indicate your answer by writing the letter A through G for the term or phrase in the blank provided. A. Ethics B. Fraud triangle C. Prevention D. Internal controls E. Sarbanes-Oxley Act 1. Requires the SEC to pay whistleblowers. 2. Examines whether financial statements are prepared using GAAP; it does not ensure absolute accuracy of the statements. 3. Requires documentation and verification of internal controls and increases emphasis on internal control effectiveness. 4. Procedures set up to protect company property and equipment, ensure reliable accounting, promote efficiency, and encourage adherence to policies. 5. A less expensive and more effective means to stop fraud. 6. Three factors push a person to commit fraud: opportunity, pressure, and rationalization. 7. Beliefs that distinguish right from wrong.arrow_forwardAn independent audit aids in the communication of economic data because the audit ________. A. Confirms the exact accuracy of the management's financial representations. B. Lends credibility to the financial statements. C. Guarantees that the financial data are fairly presented. D. Assures the readers of financial statements that any fraudulent activity has been corrected.arrow_forwardDerermine whether statement 1 and statement 2 is true or false 1. S1- The main source of the auditor’s understanding about the status of cases and litigations faced by the entity is the entity’s legal counsel S2- Control activities may be applied on either manual system, computerized system of combination of both. a. False, False b. True, False c. False, True d. True, True 2. S1- Studying the relationship of financial information with another information, whether financial or non-financial, is an example of an analytical procedure. S2-To reduce audit risk to an acceptable low level, the auditor should determine overall responses assessed risks at the assertion level a. False, False b. True, False c. False, True d. True, Truearrow_forward
- 1. CPAs may audit around or through computers in the examination of financial statements of client who utilize computer to process accounting data. Required: a. Describe the auditing approach referred to as auditing around the computer. b. Under what condition does the CPA decide to audit through the computer instead of around the computer?arrow_forwardWhich of the following is NOT one of the purposes of internal control? a. to guarantee the success of the business b. to safeguard the entity’s assets and resources c. to deter errors, fraud, and theft d. to ensure the accuracy and completeness of the accounting dataarrow_forwardWhich one of the following is not an objective of a system of internal controls? Select one: 1. Overstate liabilities in order to be conservative 2. Enhance the accuracy and reliability of accounting records 3. Safeguard company assets 4. Reduce the risks of errorsarrow_forward
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