Auditing: Describe an audit program and the purposes it serves

a. The first generally accepted auditing standard of field work requires, in part, that “the work is to be adequately planned.” An effective tool that aids the auditor in adequately planning the work is an audit program. Required: Describe an audit program and the purposes it serves. b. Auditors frequently refer to “standards” and “procedures.” Standards are measures of the quality of the auditor’s performance. Standards specifically refer to the 10 generally accepted auditing standards. Procedures relate to acts that the auditor performs while trying to gather evidence. Procedures specifically refer to the methods or techniques the auditor uses in conducting the examination. Requi... click for more

Responsibilities of auditors in a new engagement with suspected fraud.

Post, CPA, accepted an engagement to audit the financial statements of General Company, a new client. General is a publicly held retailing entity that recently replaced its operating management. In the course of applying auditing procedures, Post discovered that General’s financial statements may be materially misstated due to the existence of fraud. Required: a. Describe Post’s responsibilities regarding the circumstance described. b. Describe Post’s responsibilities to report (including what type of opinion) on General’s financial statements and other communications if Post is precluded from applying necessary procedures in searching for fraud. c. Describe Post’s responsibilit... click for more

Segregation of auditor duties

The size of an entity can affect the components of internal control. Segregation of duties is a control activity that is important for adequate control. The following example presents a scenario where the auditor can provide assistance to the entity in establishing proper segregation of duties. TameBird Industries produces meals for airlines and nursing homes. For the prior two audit engagements, your firm has written a management letter recommending that TameBird establish better segregation of duties in the accounts receivable and accounts payable functions. Tom Tuffnut, controller for TameBird, has received authorization to hire an additional clerk to work in the accounting area. Tom now ... click for more

Audit Questions: observation, fixed assets, unrecorded transactions

Please help with these four questions _____ 12. The use of a “blind” purchase order is designed to prevent errors by the: A. Purchase department B. Receiving department C. Stores department D. Accounting department _____13. Which of the following best describes the auditors’ typical observation of plant and equipment? A. The auditors observe a physical inventory of plant and equipment, annualy. B. The auditors observe all additions to plant and equipment made during the year. C. The auditors observe all major plant and equipment items in the clients’ accounts each year. D. The auditors observe major ad... click for more

Auditing Questions: unrecorded liabilities, internal control, treasury stock

_____ 17. Which of the following internal control procedure that is usually applied to accounts payable? A. Periodic confirmation of accounts payable B. Mailing statements to vendors detailing their account C. Periodic aging of accounts payable D. Reconciliation of vendor statements with accounts payable _____ 18. The auditors’ search for unrecorded liabilities is completed: A. During an interim period B. At the balance sheet date C. Subsequent to the balance sheet date D. At any time during the examination _____ 19. Internal control over bonds payable is best when: A. The company utilized the services of a bond ... click for more