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
Concept explainers
Question
Chapter 7, Problem 45ITC
To determine
Fill the given chart by using the given options.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
You are an independent auditor attending an engagement interview with the client. The client’s organization has recently implemented a data warehouse. Management is concerned that the audit tests that you perform will disrupt operations and suggests that instead of running tests against the live operational database, you draw the data for your analytical reviews and substantive tests of details from the data warehouse. Management points out that operational data are copied weekly into the warehouse and everything you need will be contained there. This will enable you to perform your tests without disrupting routine operations. You agree to give this some thought and get back to the client with your answer. Required Draft a memo to the client outlining your response to their proposal. Mention any concerns you might have.
You are an audit graduate working for an audit firm. A client has said to you that you seem to be endlessly documenting matters and queries is this necessary as it is undoubtedly increasing the cost of the audit.
REQUIRED
Succinctly explain what your answer to the client should be.
Marsha Mason, CPA, believes that it is appropriate to obtain an understanding of internal control about halfway through the audit, after she is familiar with the client’s operations and the way the system actually works. She has found through experience that filling out internal control questionnaires and flowcharts early in the engagement is not beneficial because the system rarely functions that way it is supposed to. Later in the engagement, the auditor can prepare flowcharts and questionnaires with relative ease because of the knowledge already obtained on the audit. Evaluate her approach.
Chapter 7 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - Identify the four types of control activities and...Ch. 7 - One basic concept of internal control is that no...Ch. 7 - Prob. 10RQ
Ch. 7 - Prob. 11RQCh. 7 - Prob. 12RQCh. 7 - Prob. 13RQCh. 7 - Prob. 14RQCh. 7 - Prob. 15RQCh. 7 - Prob. 16RQCh. 7 - Prob. 17RQCh. 7 - Prob. 18RQCh. 7 - Prob. 19RQCh. 7 - Prob. 20RQCh. 7 - Prob. 21RQCh. 7 - Prob. 22RQCh. 7 - Prob. 23RQCh. 7 - Management is responsible for designing and...Ch. 7 - Prob. 25QRACh. 7 - Prob. 26QRACh. 7 - Prob. 27QRACh. 7 - Prob. 28QRACh. 7 - Prob. 29QRACh. 7 - Prob. 30QRACh. 7 - Prob. 31QRACh. 7 - During your first audit of a medium-size...Ch. 7 - Prob. 33QRACh. 7 - Prob. 34QRACh. 7 - Which of the following would be least likely to be...Ch. 7 - Prob. 35BOQCh. 7 - Prob. 35COQCh. 7 - Prob. 35DOQCh. 7 - Prob. 35EOQCh. 7 - Prob. 35FOQCh. 7 - Prob. 35GOQCh. 7 - Prob. 35HOQCh. 7 - Which of the following is not an advantage of...Ch. 7 - Prob. 35JOQCh. 7 - Prob. 35KOQCh. 7 - Prob. 35LOQCh. 7 - Prob. 36OQCh. 7 - Listed below are controls that have been developed...Ch. 7 - Prob. 38OQCh. 7 - For each term in the first column, find the...Ch. 7 - Prob. 40AOQCh. 7 - Prob. 40BOQCh. 7 - Prob. 40COQCh. 7 - Prob. 40DOQCh. 7 - Prob. 40EOQCh. 7 - Prob. 41PCh. 7 - Prob. 42PCh. 7 - Prob. 43PCh. 7 - Prob. 44PCh. 7 - Prob. 45ITC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- You were recently hired by the CPA firm Honson & Hansen. Before you start working, the firm requires that you participate in the first-year staff training course. The instructor asks you to prepare answers for the following questions: a. How is audit evidence defined? b. How is the collection of audit evidence related to management assertions? c. What are the two key characteristics of audit evidence that an auditor must consider when evaluating the quality of the evidence? Describe the meaning of each of these characteristics in the context of auditing.arrow_forwardYou are an auditor working with JUMAN audit firm. JUMAN audit firm accepted two engagements to audit the financial statements of MUNER company and MUHEET company. Explain how risk of material misstatement should he assessed and what effect that assessment will have on detection risk for the following audit clients: MUHEET Corporationis one of several companies engaged in the manufacture of high- speed, high- capacity data storage devices. The industry is very competitive and subject to quick changes in technology. MUHEET’s operating results would place the company in the second quartile in terms of profitability and financial position. The company has never been the leader in the industry, with its products typically slightly behind the industry leaders in terms of performance.arrow_forwardAn IT auditor is performing a test of the company's user access administration process, and has selected a random sample of 25 user access requests to evaluate. The IT audit test procedures revealed that 1 of the 25 sampled user access requests has not been properly authorized according to company policy. As a key next step in the IT audit process, the IT auditor should (select the BEST response): a) Communicate this concern to the Chief Executive Officer as soon as possible. b) Communicate this concern to the Audit Committee as soon as possible. c) Disregard the finding entirely. d) Perform additional audit procedures to better understand the risks related to the issue, as well as the root cause of the problem.arrow_forward
- You are an auditor. The client's organization has recently implemented ERP system and data warehouse. During the engagement interview with the client, management has suggested that instead of running tests against the live operational database, you can draw the data from your tests of details from the data warehouse. This is because management believe that audit tests against the live operational database can disrupt operations. Management explains that data are updated weekly in the data warehouse. You need to think about their suggestion and get back to them with your answer. Required: write a memo to the management with your answer to their suggestion and your concerns (if any).arrow_forward1. List three reasons management may ask for an operational audit to be performed and explain how the audit program would be impacted by each of them. 2. Explain the importance of identifying risk factors and using them during the planning phase. 3. Give two examples where document inspection is a useful technique to examine operational risks and related controls. 4. Explain professional skepticism and why it is important for all auditors. 5. Explain the acronym CCCER. 6. What are the defining characteristics of persuasive audit evidence? 7. What are the key characteristics of well prepared working papers? 8. What do internal auditors mean when they refer to the nature, extent, and timing of audit procedures? 9. What information should be included in a well designed final assurance engagement communication? 10. What actions regarding assurance engagement observations must the internal audit function take after the final engagement communication is disseminated?arrow_forwardPatrick Houghton was meeting with his manager to plan audit strategy in order to determine the amount of time to spend testing the client's internal controls and conducting detailed testing of transactions and account balances. Determining the audit strategy occurs during which phase of the audit? a. client acceptance stage b. planning stage c. performing stage d. reporting stagearrow_forward
- In reviewing the processes, procedures, and internal controls of one of your audit clients, VeronicaCorporation, you notice the following practices in place. Veronica has recently installed a new electronicdata processing (EDP) system that affects the accounts receivable, billing, and shipping records. Thecompany identified a computer operator who is permanently assigned to each of the functions ofaccounts receivable, billing, and shipping. Each of these computer operators is given the responsibilityof running the program for transaction processing, making program changes, and reconciling thecomputer log. To prevent an operator from having exclusive access to the tapes and documentation,the computer operators randomly rotate the custody and control tasks every two (2) weeks over themagnetic tapes and the system documentation. Access controls to the computer room consist ofmagnetic cards and a digital code for each operator. Moreover, the system analyst and the computeroperation…arrow_forwardYou are an audit graduate working for an audit firm. A client has said to you that you seem to be endlessly documenting matters and queries is this necessary as it is undoubtedly increasing the cost of the audit.arrow_forward1. Computer Assisted Audit Techniques (CAATs) are important tools than an IS auditor uses to gather and analyze data during an IS audit. One type of tool is the Generalized Audit Software (GAS). In your own words, how does CAATs affect the work of an IS auditor? What are the benefits of using CAATs in conducting an Audit? 2. Every organization has controls in place. Such controls must be effective. They are effective if they prevent, detect, or contain incidents and enable recovery from events that cause risks. Enumerate those three types of control and explain how these controls effectively address those events that cause risksarrow_forward
- You are required to read the following statement carefully, and then, discuss the factors behind the statement content, stating examples of how this content can be implemented: "Auditors develop overall audit plans to ensure that they obtain sufficient appropriate audit evidence. The timing and extent of audit procedures auditors use is a matter of professional judgement, which depends upon a number of factors". Plz don’t make it long answerarrow_forwardChoose the one correct answer. Which of the following audit approaches is most likely to provide an auditor the most confidence in an internal control procedure's effectiveness? *performing analytical proceduresinspection of supporting documentsinquiry of the client's management and personnelconducting a tour on client's premisesarrow_forwardAnswer the following from Chapter 7 of the textbook (write a one page response for each question): Discussion Question 41: Explain the necessity for performing substantive testing even for audit clients with strong internal controls and sophisticated IT systems.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning