Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 43QRA
To determine
Evaluate the issue related to working papers.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In our discussion of the KPMG professional judgment framework, we pointed out that biased judgments can be made because of judgment tendencies. One such tendency that was not included in the framework is self-serving bias. Explain what you think this means and how it might influence audit judgment.
Which of the following statements is correct regarding auditor independence in fact and in appearance?
The auditor should be independent both in fact and in appearance.
The auditor should be independent in fact but not in appearance.
O The auditor should be independent in appearance but not in fact.
When the auditor does not challenge an inappropriate journal entry made by the client in order to keep the client for
future audits, this is an example of loss of independence in appearance.
Some criticize the accounting profession for using expressions in the audit report that seem to be building in deniability should the client commit a fraudulent act. What expressions enable the CPA to build a defense should the audit wind up in the courtroom? Do you see anything wrong with these expressions from an ethical point of view?
Chapter 5 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Distinguish among routine, nonroutine, and...Ch. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - As part of the verification of accounts receivable...Ch. 5 - Prob. 9RQCh. 5 - When in the course of an audit might the auditors...
Ch. 5 - Prob. 11RQCh. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14RQCh. 5 - Prob. 15RQCh. 5 - Prob. 16RQCh. 5 - Prob. 17RQCh. 5 - Prob. 18RQCh. 5 - Prob. 19RQCh. 5 - What disclosures should be made in the financial...Ch. 5 - Prob. 21RQCh. 5 - Prob. 22RQCh. 5 - Prob. 23RQCh. 5 - Prob. 24RQCh. 5 - Prob. 25RQCh. 5 - Prob. 26RQCh. 5 - Prob. 27RQCh. 5 - Prob. 28RQCh. 5 - Prob. 29RQCh. 5 - Prob. 30RQCh. 5 - Prob. 31RQCh. 5 - I have finished my testing of footings of the cash...Ch. 5 - Prob. 33RQCh. 5 - Prob. 34RQCh. 5 - Financial statements contain a number of...Ch. 5 - Prob. 36QRACh. 5 - In an audit of financial statements, the auditors...Ch. 5 - Prob. 38QRACh. 5 - Prob. 39QRACh. 5 - Prob. 40QRACh. 5 - Prob. 41QRACh. 5 - Prob. 42QRACh. 5 - Prob. 43QRACh. 5 - Prob. 44QRACh. 5 - Prob. 45AOQCh. 5 - Prob. 45BOQCh. 5 - Prob. 45COQCh. 5 - Prob. 45DOQCh. 5 - Prob. 45EOQCh. 5 - Prob. 45FOQCh. 5 - Prob. 45GOQCh. 5 - Prob. 45HOQCh. 5 - Prob. 45IOQCh. 5 - Prob. 45JOQCh. 5 - Prob. 45KOQCh. 5 - A difference of opinion concerning accounting and...Ch. 5 - Prob. 46OQCh. 5 - Prob. 47OQCh. 5 - Prob. 48AOQCh. 5 - Prob. 48BOQCh. 5 - Prob. 48COQCh. 5 - The cost of analytical procedures in terms of time...Ch. 5 - Prob. 48EOQCh. 5 - Prob. 49OQCh. 5 - Prob. 50PCh. 5 - Prob. 51PCh. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - Prob. 56P
Knowledge Booster
Similar questions
- Roger Royce, CPA, has encountered a situation that he thinks may pose a threat to his independence with respect to Watson, Incorporated an audit client. The situation is not addressed by an independence rule or regulation. Using the AICPA Conceptual Framework for Independence Standards, describe how Royce can determine whether the threat truly impairs his independence.arrow_forwardWhich of the following statements is false regardingsubstantiveanalytical procedures?a. Substantive analytical procedures are not required tobe performed on all audit engagements.b. If the results of substantive analytical proceduressuggest that an account balance is materially correct,the auditor can reduce the evidence needed fromtests of details.c. The auditor would perform substantive analyticalprocedures after tests of details.d. All of the above statements are true.arrow_forwardIf the audit report states that the financial statement is not free from material misstatements , it becomes a serious matter because: it provides assurance that the audit has been carried out by a qualified auditor. it damages the credibility of the financial statements. a remark in an audit report implies that the double entry supporting the financial statements must be correct. An opinion that shows auditors concern enhances the credibility of the financial statements.arrow_forward
- The auditor’s report in the U.S. does not provide the user with details on the level of materiality that the auditor used during the audit. Do you think that the audit report should disclose materiality levels? Why might the user find such information useful? Why might auditors hesitate to publicly reveal the level of misstatement that they will accept as “immaterial”? Would management have a preference regarding the public disclosure of materiality?arrow_forwardDo you believe that the SEC should prohibit auditors from providing all nonaudit services for audit clients? Use ethical reasoning to support your answer.arrow_forwardAn auditor would issue an adverse opinion if: * The audit was begun by other O independent auditors who withdrew from the engagement. A qualified opinion cannot be given O because the auditor lacks independence. A restriction on the scope of the audit was significant. The statements taken as a whole do not fairly present the financial condition and results of operations of the company.arrow_forward
- 2. The auditors who find that the client has committed an illegal act would be most likely to withdraw from the engagement when the: Select one:a. Illegal act has material financial statement implications.b. Auditors cannot reasonably estimate the effect of the illegal act on the financial statements.c. Illegal act has received widespread publicity.d. Management fails to take appropriate corrective action.arrow_forwardAn auditor has concluded that substantial doubt exists and that the client will not be able to meet its obligations as they become due for a reasonable period of time. Financial statement and footnote disclosures are adequate, detailing the conditions, events, and management's plans to alleviate the doubt. However, the CPA believes that substantial doubt remains. The CPA must add a Going Concern section to the audit report, discussing the Substantial Doubt. How should the audit opinion be modified? a. No modification. b. A qualified opinion. c. An adverse opinion. d. A disclaimer of opinion.arrow_forward1. What is auditor independence, and what is its significance to the audit profes- sion? Based on the case information, do you believe that Andersen violated the second general standard? Why or why not? 2. Refer to the responsibilities principle of Generally Accepted Auditing Stan- dards (GAAS). Given the reluctance of WorldCom’s management team to communicate with Andersen, do you believe that Andersen exercised due care and professional skepticism in completing the audit? Why or why not? 3. In terms of audit effectiveness and efficiency, briefly explain the difference between substantive analytical procedures and substantive tests of details. Do you believe it was appropriate for Andersen to rely primarily on sub- stantive analytical procedures? Why or why not? 4. Consult Paragraphs 14 and A8 (in Appendix A) of PCAOB Auditing Standard No. 5. Provide an example of both a preventive control and a detective control that could address the risk that a fraudulent top-side adjusting journal…arrow_forward
- Which of the following statements is not true with respect to written representations?a. The failure of management to furnish them is a significant scope limitation, resulting in either an adverse opinion or a disclaimer of opinion.b. They should address management’s responsibility for designing internal control to prevent and detect fraud.c. Auditors use them to corroborate information received during the audit from the client and its employees.d. They are dated the same date as the auditor’s reports.arrow_forwardQ. According to ISA 200, Which of the following statement is true with respect of inherent limitation of audit? a- The auditor cannot reduce the audit risk to zero but can obtain absolute guarantee that the financial statements are free from material misstatements. b- The auditor can reduce the audit risk to zero but cannot obtain absolute guarantee that the financial statements are free from material misstatements. c- The auditor cannot reduce the audit risk to zero but cannot obtain absolute guarantee that the financial statements are not free from material misstatements. d- The auditor cannot reduce the audit risk to zero but cannot obtain absolute guarantee that the financial statements are free from material misstatements.arrow_forwardWhich of the following statements are correct? Select which option is correct. Select one or more: A. The level of professional skepticism can be reduced where the auditor has past experience with the entity indicating the honesty and integrity of management. B. Professional skepticism implies an expectation of fraud or error, so is a biased viewpoint. C. The level of professional skepticism needs to be maintained throughout the whole engagement. D. Professional skepticism is not important in considering management's explanations for unusual trendsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning- Business/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:Cengage
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Business/Professional Ethics Directors/Executives...
Accounting
ISBN:9781337485913
Author:BROOKS
Publisher:Cengage