Professional Skepticism

What is meant by professional skepticism? Can you think of a situation where the evidence says one thing but your gut tells you something else?

Auditing Question

4. The third generally accepted standard of audit fieldwork requires that auditors obtain sufficient competent audit evidence to afford a reasonable basis for an opinion regarding the financial statements under examination. In considering what constitutes sufficient competent audit evidence, a distinction should be made be ...continues

Fraud = f (incentive/pressure, opportunity, attitude/rationalization)

What is meant by the formula: Fraud = f (incentive/pressure, opportunity, attitude/rationalization)?

How to write an audit approach

WRITE AN AUDIT APPROACH FOR THESE TWO PROBLEMS 6.47 Employee Embezzlement via Cash Receipts and Payment of Personal Expenses. This case is designed like the ones in the chapter. They give the problem, the method, the audit trail, and the amount. In this case, you can assume you have received the informant’s message. Your a ...continues

Auditing - Assessing Controls

Assessing Controls Assume that you were given these five options to describe the tone at the top: • Excellent • Moderate • Indifferent • Nonexistent • Machiavellian (do whatever it takes) Required a. How would the auditor go about assessing which of the terms best describes the tone at the top? b. What effect would eac ...continues

Auditing

While performing a substantive test of details during an audit, the auditor determined that the sample results supported the conclusion that the recorded account balance was materially misstated. It was, in fact, not materially misstated. The situation illustrates the risk of A) Incorrect rejection. B) Incorrect acceptance ...continues

Auditing Questions

Standards and related topics 1. Which of the following best describes which is meant by the term generally accepted auditing standards? a. Procedures to be used to gather evidence to support financial statements. b. Measures of the quality of the auditor’s performance. c. Pronouncements issued by the Auditing Standards ...continues

Auditing Payroll

What are the common errors and frauds in the personnel and payroll cycle? Which control characteristic are auditors looking for to prevent or detect these errors and frauds? What features of the payroll system could be expected to prevent or detect payment of a fictitious employee? What about the omission of payment to an employ ...continues

Auditing Question

Why is it important to place emphasis on the existence and rights (ownership) assertions when auditing accounts receivable?Which audit procedures are usually the most useful for auditing the existence and rights assertions? What analytical procedures might be informative regarding the existence assertion?

Auditing

What account balances are included in a revenue and collection cycle? What specific control procedures should be in place and operating in internal control governing revenue recognition and cash accounting? What assertions are made about classes of transactions and events in the revenue and collection cycle?