Auditing

For each of the following questions, select the single best answer: (a) All of the following are examples of non-sampling risk in a sample of purchase invoices, except. - i) the auditor chooses to use a judgment sample and the sample selected was not representative of the population; ii) The auditor did not recognize an error in the freight charges because the terms of the contract were complex and the auditor did not understand them all; iii) The sample was selected from the accounts payable trial balance; for the purpose for which it was selected, it should have been selected from paid invoices iv) none of the above. b. The factors affecting the amount of audit risk which t... click for more

GAAS

1. Explain the nature and functions of auditing. 2. Relate your explanations to the audit functions in your organization or an organization you are familiar with. 3. Include a description of the elements of the Generally Accepted Auditing Standards and describe how these standards apply to financial, operational, and compliance audits. 4. Explain the effect that the Sarbanes-Oxley Act of 2002, and the public company accounting oversight board will have on audits of publicly traded companies. 5. Discuss the additional requirements that are placed on auditors from this Act, and the actions of the PCAOB.

The AICPA and the IIA

The AICPA and the IIA have positioned the auditing professions to become “assurance professions.” Questions: a. What is the difference between assurance services, attestation services, and auditing services? b. What are the economic issues that drive the increased demand for assurance services? c. Identify one assurance engagement and one attestation engagement other than an audit of financial statements. What are the differences between the two? d. Does an audit always involve three parties, i.e. management, a third-party user, and an auditor? Explain.

156c

How does the auditing profession work to create or communicate a reasonable set of expectations that users should hold?

Materiality

Can materiality be quantified? If so, how? What are the three steps in applying materiality to an audit? What factors should be considered when allocating materiality to an account balance?