Auditing Questions: risk, disclosure, departure

Please help with these four questions _____ 22. Which of the following types of matters do not generally require disclosure in the financial statements? A. General risk contingencies B. Commitments C. Loss contingencies D. Liabilities to related parties _____ 23. A refusal by a lawyer to refusal information related to litigation included in the letter of inquiry is likely to result in: A. Confirmation of related lawsuits with the claimants. B. Qualification of the audit report C. An assessment that loss of the litigation is probable D. An adverse opinion. _____ 24. When a client declines to disclose essent... click for more

Four multiple questions related to auditing

Four multiple questions related to auditing. 1. Which of the following is least likely to be appropriate as the basis for determining the preliminary judgment about materiality in the audit of a set of financial statement? a. Net income before taxes. b. Current assets c. Owners’ equity d. Inventory 2. Which of the following statements regarding inherent risk is correct? a. The inherent risk assigned in the audit risk model is unaffected by the auditor’s experience with client’s organization. b. Most auditors set a low inherent risk in the first year of an audit and increase it if experience shows that it was incorrect. c. Most auditors set a high inherent risk in the first y... click for more

Question related to auditing - First standard of field work

The first standard of field work recognizes that early appointment of the independent auditor has many advantages to the auditor and the client. which of the following advantages is least likely to occur as a result of early appointment of the auditor? a. the auditor will be able to plan the audit work so that it may be done expeditiously. b. the auditor will be able to complete the audit work in less time. c. the auditor will be able to better plan for the observation of the physical inventories. d. the auditor will be able to perform the examination more efficiently and will be finished at an early date after the year-end.

Crazy Eddie, Inc.

1. Compute key ratios and other financial measures for Crazy Eddie during the period 1984–1987. Identify and briefly explain the red flags in Crazy Eddie’s financial statements that suggested the firm posed a higher-than-normal level of audit risk. 2. Identify specific audit procedures that might have led to the detection of the following accounting irregularities perpetrated by Crazy Eddie personnel: (a) the falsification of inventory count sheets, (b) the bogus debit memos for accounts payable, (c) the recording of transhipping transactions as retail sales, and (d) the inclusion of consigned merchandise in year-end inventory. 3. The retail consumer electronics industry was undergoing... click for more

Audit of Stockholders' Equity - Zeitlow Corporation

A CPA firm is engaged in the examination of the financial statements of Zeitlow Corporation for the year ended December 31, 2006. Zeitlow Corporation�s financial statements and records have never been audited by a CPA. The stockholders� equity section of Zeitlow Corporation�s balance sheet at December 31, 2006, follows: Stockholders� Equity: Capital stock�10,000 shares of $10 par value authorized: 5,000 shares issued and outstanding $ 50,000 Capital contributed in excess of par value of capital stock 58,800 Retained earnings 105,000 Total stockholders� equity $213,800 Founded in 1985, Zeitlow Corporation has ten stockholders and serves as its own registrar a... click for more