External Audit Concerns
Not what you're looking for?
Please help so that I can complete the following assignment:
The following situations have caused you to become concerned about the quality of an upcoming external audit:
1-The audit will not begin until February, 2006, after the books have been closed, so the external auditors will not be able to confirm the accounts receivable cutoff, physically examine the inventory, and examine other important procedures.
2-You have just been advised that the auditing firm has been acquired by a larger auditing firm and that the auditor coming to your firm will be unfamiliar with the firm.
3-The acquiring auditing firm's principal partner is a cousin to the CEO of your firm.
4-Some areas of control that have been of concern to the auditing department will not be audited due to workload and timing constraints.
5-Some of the methodology used in the accounting department to compile the financial statements may not comply with GAAP standards.
GAAS provides three categories of standards and 10 standards by which an audit should be performed. You are concerned that some of the listed situations may be in violation of the GAAS standards and have decided to review the GAAS standards to detect any possible violations.
List each of these standards in the correct category.
Identify those standards that you believe may be compromised by the listed situations.
Describe specific actions that you believe should be taken to comply with the GAAS standards.
Purchase this Solution
Solution Summary
This posting gives you an in-depth insight into External Audit Concerns
Solution Preview
List each of these standards in the correct category.
Identify those standards that you believe may be compromised by the listed situations.
Describe specific actions that you believe should be taken to comply with the GAAS standards
There are three categories of standards in GAAS. These are general standards, standards of fieldwork and standards of reporting. These are the three major sections. By relying on these three sections of the GAAS the possibility of missing important information is reduced substantially (Beasley M S, Carcello J V. Miller 2005), .
The general standards are independence, professional judgment, competence, and quality control and assurance. The standards of field work are planning and supervision of work, a sufficient understanding of the entity, its environment, its internal control, to assess the risk of material misstatement at financial statements either due to error or having an intention to commit frauds and obtain sufficient appropriate evidence through performing audit procedures to afford a reasonable bass for opinion of the financial statements under audit. The standards of reporting are. The report must say that the financial statements have been prepared in accordance with generally accepted accounting principles. The repost must identify the circumstances in which such principle have not been consistently been observed, information disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise mentioned in the report. Finally, ...
Purchase this Solution
Free BrainMass Quizzes
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Operations Management
This quiz tests a student's knowledge about Operations Management
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Motivation
This tests some key elements of major motivation theories.