Ratios

Which four ratios do you think would be helpful performing an audit of manufacturing company? Support your answer.

Free market

What are the factors that drive the demand for auditing in a free market society? Would there still be a demand for auditing even if the law did not require it? Why or why not?

DOUGHTIE'S FOODS, INC.

CASE 2.1 DOUGHTIE'S FOODS, INC. In the late 1970s, William Nashwinter accepted a position as a salesman with Doughtie's Foods, Inc., a publicly owned food products company headquartered in Portsmouth, Virginia.1 The ambitious young salesman impressed his superiors with his hard work and dedication and was soon promoted to ge ...continues

Provide the Trubeys with an overview of the key internal control issues...

3. Assume that you have a small CPA firm and have been contacted by a husband and wife, John and Myrna Trubey, who are in the final stages of negotiating to purchase a local jewelry store. John will prepare jewelry settings, size jewelry for customers, and perform related tasks, while Myrna will be the head salesclerk. The Trube ...continues

Disclose info

How does the client's refusal to disclose information that is required by GAAP affect the auditor's report?

Evidence

What do you consider the easiest type of audit evidence to obtain and why? What do think is the hardest type of evidence to obtain and why?

8-1

1. When assessing audit risk, should auditors consider the type and number of third parties that may ultimately rely on the client’s financial statements? 2. Should auditors insist that audit engagement letters identify the third parties to whom the client intends to distribute the audited financial statements? 3. Would ...continues

In performing an audit...

18. In performing an audit, Jackson, CPA, discovers that the professional competence necessary for the engagement is lacking. Jackson informs management of the situation and recommends another local CPA firm, and management engages this other firm. Under these circumstances A) Jackson may request compensation from the other C ...continues

Basic Sampling: a. What would you tell Reagan about the advantages and disadvantages of sampling? b. Reagan is interested in knowing the advantages and disadvantages of statistical sampling. What would you tell him? c. Reagan has heard about sampling and nonsampling risk and is concerned about these risks. 1. Define sampling and nonsampling risk. 2. How can Reagan control his exposure to sampling and nonsampling risk? 3. What are some possible examples of sampling and nonsampling risk in this situation?

E.54 Basic Sampling: Comprehensive. Reagan is considering opening a multipurpose hardware and lawn store in Anytown, USA. Based on his knowledge of the industry, he feels that if the average household income is greater than $35,000, the store will ultimately be successful. He was planning on attempting a census of the income lev ...continues

Auditing

When would it be appropriate to have an unscheduled audit? What are the steps in adminstering an audit?