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Introduction: Audit is the activity performed by the professional known as the auditor. In audit the validity and reliability of the information given by the company is correct of not. True and fair view of the books of accounts is shown in the
Altering audit documentation undermines the integrity of the Board’s inspection processes. It is considered as fraud to alter audit documentation inaccurately.
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Introduction: Audit is the activity performed by the professional known as the auditor. In audit the validity and reliability of the information given by the company is correct of not. True and fair view of the books of accounts is shown in the balance sheet of the company and annually present to the shareholder and boards of director of the company.
Need to worry about the outcome of the inspection taking place of an audit engagement.
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Introduction: Audit is the activity performed by the professional known as the auditor. In audit the validity and reliability of the information given by the company is correct of not. True and fair view of the books of accounts is shown in the balance sheet of the company and annually present to the shareholder and boards of director of the company.
The process that might include auditor doing fraudulent act by altering audit documentation.
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Introduction: Audit is the activity performed by the professional known as the auditor. In audit the validity and reliability of the information given by the company is correct of not. True and fair view of the books of accounts is shown in the balance sheet of the company and annually present to the shareholder and boards of director of the company.
Awareness of improper alteration of audit documentation to inform them.
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Auditing: A Risk Based-Approach (MindTap Course List)
- Refer to Exhibit 2.5 and answer the following questions. a. (Sections 101, 104, and 105) How does the establishment and operation of the PCAOB help to ensure quality external audits? How will audit firm inspections and investigations by the PCAOB help ensure high audit quality? b. (Sections 201-203) How do Sections 201-203 address audit ()r independence concerns? c. (Section 206) What is a cooling-off period, and how does it address auditor independence concerns? d. (Section 301) How do the audit committee requirements help ensure effective corporate governance? e. (Sections 302 and 906) How do the officer certification requirements help to address the risk of fraud in publicly traded organizations? What is the likelihood that a CFO who is committing fraudulent financial reporting would sign the certification falsely, and what are your reactions to that possibility? f. (Section 401) How does this section relate to the Enron fraud? g. (Section 404) How do the management assessment and audit or attestation of internal controls contained in this section help to address the risk of fraud in publicly traded organizations? h. (Section 407) Why is it important that at least one member of the audit committee be a financial expert? What are the financial reporting implications if the audit committee does not have any individuals serving on it who possess financial expertise? i. (Section 802) How does this section relate to the Enron fraud?arrow_forwardAudit Report Deficiencies: Accounting Change and Uncertainty. The following auditors’ report was drafted by Quinn Moore, a staff auditor with Tyler & Tyler, CPAs, at thecompletion of the audit of the financial statements of Park Publishing Company for theyear ended September 30, 2017. The engagement partner reviewed the audit documentation and properly decided to issue an unmodified opinion. In drafting the report, Mooreconsidered the following:∙ During fiscal year 2017, Park changed its depreciation method. The engagement partner concurred with this change in accounting principles and its justification, and Mooreincluded an emphasis-of-matter paragraph in the report.∙ The 2017 financial statements are affected by an uncertainty concerning a lawsuit, theoutcome of which cannot presently be estimated. Moore included an emphasis-of-matterparagraph in the report to disclose this uncertainty.∙ The financial statements for the year ended September 30, 2016, are to be presented…arrow_forwardThe PCAOB issues audit practice alerts to highlight new, emerging, or otherwise noteworthy circumstances. Revenue is the largest account in the financial statements for many companies, and many fraudulent financial reporting cases have involved the intentional overstatement of revenue. For these reasons, the audit of revenue is often a significant focus of PCAOB inspections. PCAOB Audit Staff Practice Alert No. 12, Matters Related to Auditing Revenue in an Audit of Financial Statements, provides guidance to auditors and also highlights several deficiencies in the audit of revenue as identified through inspections. Download the practice alert at www.pcaobus.org to answer the following questions: What are the deficiencies identified by the PCAOB related to the use of substantive analytical procedures in testing revenue? What sources of information does the PCAOB recommend auditors use to develop plausible expectations of revenue when performing substantive analytical procedures? What…arrow_forward
- 11)An auditor’s engagement letter most likely will include A.A request for permission to contact the client’s lawyer for assistance in identifying litigation, claims, and assessments. B.A reminder that management is responsible for illegal acts committed by employees. C.The auditor’s preliminary assessment of the risk factors relating to misstatements arising from fraudulent financial reporting. D.Management’s acknowledgment of its responsibility for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement. 12)Early appointment of the independent auditor will enableA. A more thorough examination to be performed. B.A proper study and evaluation of internal control to be performed. C.Sufficient competent evidential matter to be obtained. D.A more efficient examination to be planned. 13)An auditor who accepts an audit engagement and does not possess the industryexpertise of the business entity,…arrow_forwardThe internal auditors of Brown Electrical Company report to the controller. Because of changes made in the past year to several of the transaction processing programs, the internal auditors created a new test data set. The external auditors requested that the old data set also be run. The internal auditors, embarrassed, explained that they overwrote the original test data set. Required: Outline any potential risks, and determine the courses of action the external auditor should take.arrow_forwardSmith and Johns, a CPA firm, was approached by Pioneer Company to conduct an audit for its financial statements for the year 2020. Smith and Johns asked Pioneer Company to grant it an approval to contact the predecessor auditor before giving its acceptance on the new engagement. Smith and Johns would most probably inquire the predecessor auditor about the following issue(s): * Management integrity Fraud and illegal acts committed in pri years Reasons for change of auditors All of the above None of the abovearrow_forward
- At the closing meeting, a representative of the top management of the auditeeorganisation informs the auditor that they have now implemented a processto correct a serious nonconformity that the auditor found on the first day of atwo-day Stage 2 audit. The representative of top management proposes thatthe auditor examine the process during the meeting and then withdraw thenonconformity report. How should the auditor respond?arrow_forwardCredPoint SAOG Company is unhappy with the audit report and threatens to change auditors next year. CredPoint SAOG is the biggest client of the auditor. The auditor’s independence may be compromised, as CredPoint SAOG is their biggest client and they do not want to lose such a client. Therefore, the auditor may issue a audit report that is favourable to CredPoint SAOG. Which threat may occur when a professional accountant may be deterred from acting objectively by threats, actual or perceived? a-Intimidation threats b-Self-interest threats c-Self-review threats d-Advocacy threatsarrow_forwardThe internal auditors of Tantacle Electrical Company report to the controller. Because of changes made in the past year to several of the transaction processing programs, the internal auditors created a new test data set. The external auditors requested that the old date set also be run. The internal auditors, embarrassed, explained that they overwrote the original test data set.Outline any potential risks and determine the courses of action the external auditor should take.arrow_forward
- Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College PubAuditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning