Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 26, Problem 19DQP
a.
To determine
Explain the term objectivity which is related with the internal audit function.
b.
To determine
Identify and discuss for all the five situations, whether the objectivity of internal audit department of Company L has been materially impaired or not.
c.
(1)
To determine
Identify whether the reporting relationship results in a problem of objectivity. Also, explain the answer.
(2)
To determine
Identify whether the objectivity of internal audit department will change if the manager of internal audit reported to the audit committee of the board of directors. Also, explain the answer.
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Steve Ankenbrandt, president of Beeb Corporation, has been discussing the company’s internal operations with the presidents of several other multidivision companies. Ankenbrandt discovered that most of them have an internal audit staff. The activities of the staffs at other companies include financial audits, operational audits, and sometimes compliance audits.
Required:
Describe the meaning of the following terms as they relate to the internal auditing function:
a. Financial auditing.
b. Operational auditing.
c. Compliance auditing.
Lajod Company has an internal audit department consisting of a manager and three staff auditors. The manager of internal audits, in turn,reports to the corporate controller. Copies of audit reports are routinely sent to the auditcommittee of the board of directors as well as to the corporate controller and the individualresponsible for the area or activity being audited.The manager of internal audits is aware that the external auditors have relied on theinternal audit function to a substantial degree in the past. However, in recent months,the external auditors have suggested there may be a problem related to the objectivity ofthe internal audit function. This objectivity problem may result in more extensive testingand analysis by the external auditors.The external auditors are concerned about the amount of nonaudit work performedby the internal audit department. The percentage of nonaudit work performed by theinternal auditors in recent years has increased to about 25% of their total…
Organizations often rely on their in-house audit department to ensure that their internal controls are being properly evaluated. Internal auditors at Babylion Company are subordinates of the controller. Comment on how well this framework works.
Chapter 26 Solutions
Auditing And Assurance Services
Ch. 26 - Prob. 1RQCh. 26 - Prob. 2RQCh. 26 - Prob. 3RQCh. 26 - Prob. 4RQCh. 26 - Prob. 5RQCh. 26 - Prob. 6RQCh. 26 - Prob. 7RQCh. 26 - Prob. 8RQCh. 26 - Prob. 9RQCh. 26 - Prob. 10RQ
Ch. 26 - Prob. 11RQCh. 26 - Prob. 12RQCh. 26 - Prob. 13RQCh. 26 - Prob. 14RQCh. 26 - Prob. 15.1MCQCh. 26 - Prob. 15.2MCQCh. 26 - Prob. 15.3MCQCh. 26 - Prob. 16.1MCQCh. 26 - Prob. 16.2MCQCh. 26 - Prob. 16.3MCQCh. 26 - Prob. 17.1MCQCh. 26 - Prob. 17.2MCQCh. 26 - Prob. 17.3MCQCh. 26 - Prob. 18.1MCQCh. 26 - Prob. 18.2MCQCh. 26 - Prob. 18.3MCQCh. 26 - Prob. 19DQPCh. 26 - Prob. 20DQPCh. 26 - Prob. 21DQPCh. 26 - Prob. 22DQPCh. 26 - Prob. 23DQPCh. 26 - Prob. 24DQP
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