Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 6, Problem 28DQP
a.
To determine
Discuss the meaning of approaching an audit with an attitude of professional scepticism.
b.
To determine
Discuss the circumstances related to accounting treatment of the vendor allowances that should increase an auditor’s professional skepticism.
c.
To determine
Discuss the factors that might have caused the auditor to inappropriately accept the assertions by the management.
d.
To determine
Develop three questions that should have been asked by the auditor related to the vendor allowances.
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Students have asked these similar questions
When evaluating audit findings, the auditor should consider any potential bias in management's
judgement. Which if the these is not included in an auditor's concerns.
1. Management's bias in estimation calculations
2. Management's bias in accounting policies
3. Management's bias in detection risk
4. Management's bias in adjusting entry calculations
Which of the following statements about materiality is considered true?
a.
Materiality is judged by the auditor using his professional knowledge and experience since materiality of an item varies with circumstances.
b.
Materiality could never influence the economic decisions of users taken on the basis of the financial information.
c.
The auditor should consider materiality but not its relationship with audit risk when conducting an audit.
d.
The size and nature of the item will not determine its materiality.
Your view of what the companies’ auditors would need to consider in the effective audit of its primary revenues. For example, what would you do to audit the revenue streams? How would you verify that they are correctly stated in the financial statements without material error? Identify no more than three audit procedures around revenue recognition for the company you selected.
Chapter 6 Solutions
Auditing And Assurance Services
Ch. 6 - Prob. 1RQCh. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - Prob. 4RQCh. 6 - Prob. 5RQCh. 6 - Prob. 6RQCh. 6 - Prob. 7RQCh. 6 - What are the six elements of professional...Ch. 6 - What are the five elements of an effective...Ch. 6 - Describe two of the more common judgment traps and...
Ch. 6 - Identify the cycle to which each of the following...Ch. 6 - Why are sales, sales returns and allowances, bad...Ch. 6 - Prob. 13RQCh. 6 - Prob. 14RQCh. 6 - Prob. 15RQCh. 6 - Prob. 16RQCh. 6 - Prob. 17RQCh. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - Prob. 20RQCh. 6 - Prob. 21.1MCQCh. 6 - Prob. 21.2MCQCh. 6 - Prob. 21.3MCQCh. 6 - Prob. 22.1MCQCh. 6 - Prob. 22.2MCQCh. 6 - Prob. 22.3MCQCh. 6 - Prob. 23.1MCQCh. 6 - Prob. 23.2MCQCh. 6 - Prob. 23.3MCQCh. 6 - Prob. 24.1MCQCh. 6 - Prob. 24.2MCQCh. 6 - Prob. 24.3MCQCh. 6 - Prob. 25DQPCh. 6 - Prob. 26DQPCh. 6 - Prob. 27DQPCh. 6 - Prob. 28DQPCh. 6 - Prob. 29DQPCh. 6 - Prob. 30DQPCh. 6 - Prob. 31DQPCh. 6 - Prob. 32DQPCh. 6 - Prob. 33DQPCh. 6 - Prob. 34DQP
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- Which of the following statements about materiality is incorrect? the preliminary assessment of materiality guides audit planning and testing materiality is used to guide the validity of information contained in the financial report materiality is a key auditing concept that is assessed during the planning stage of every audit information is considered material if it has no impact on the decision-making process of financial report usersarrow_forwardWhen planning an audit, which of the following is not a factor that affects auditors’ decisions about the quantity, type, and content of audit documentation?a. The auditors’ need to document compliance with generally accepted auditing standards.b. The auditors’ need to verify the existence of new sales contracts important for the client’sbusiness.c. The auditors’ judgment about their independence with regard to the client.d. The auditors’ judgments about materiality.arrow_forwardWhat steps should auditors take if during a compilation engagement they become aware that the financial statements are misleading?arrow_forward
- Which of the following statements concerning audit evidence is true?(1) To be appropriate, audit evidence should be either persuasive or relevant, butneed not be reliable.(2) The measure of the quantity and quality of audit evidence lies in the auditor’sjudgment.(3) The difficulty and expense of obtaining audit evidence concerning an accountbalance is a valid basis for omitting the test.(4) A client’s accounting records can be sufficient audit evidence to support thefinancial statements.arrow_forwardUnder what circumstances would an auditor choose to confirminformation such as the right of return or special sales terms in addition to the customerbalance?arrow_forward
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