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Auditing

Astor City's Audit Standards

Astor City, a small city that is not required to have independent audit, voluntarily decided to have an audit of its financial records. Currently, the city generates $900,000 in revenues. Of the revenue generated, 10% is from state sources and 2% is from federal sources. Janice Murphy, a CPA who serves on the city council has or

Green & White Corporation Bank Reconciliation

See the attached file. The records of Green & White Corporation show the following bank statement information for October: a. Balance per Bank Statement, October 31, 2012, $62,000 b. The bank account balance in the general ledger (Books) on October 31, 2012, $57,035 c. Service charge indicated on the bank statement as

If the bank sells a 3,000 traveler's check ...

If the bank sells a 3,000 traveler's check, which of the following statements is true? a) the bank must report the transaction on a currency transaction on a currency transactions report form b) the bank must obtain identification information from the buyer but need not retain the information if the buyer is a customer

bank panic

Does the fact that your bank keeps only a fraction of your account balance in reserve make you uncomfortable? Why don't people rush to the bank and retrieve their money? How do banks prevent panics from occurring?

Audit standards

Statement of Audit Standard 70 - Service Organization audit is an audit on organizations that provide various service to other businesses which, for different reasons may decided to outsource one or more of their activities. During annual audit of companies that have outsourced part of their activities, the external auditor ne

Audit program outlines

Audit program outlines in detail what an auditor plans to do and the expected required time to accomplish each task. An audit engagement may involve more than one audit program. For example, we can have an audit program for accounts receivable, one for cash, one for inventory, etc. can you describe the benefits of audit program

audit notices

1) What should a taxpayer (T/P) do when he receives the audit notice? 2) Can the T/P avoid meetings with IRS auditor once he hires a representative? 3) What can the T/P do if no agreement can be reach between him and IRS? 4) What are some common examples of the timing strategy?

9-23 (Detection risk and audit evidence) risk components matrix

9-23 (Detection risk and audit evidence) Shown below are five situations in which the auditor wishes to determine planned acceptable levels of detection risk and the planned levels of evidence needed for specific financial statement assertions. The auditor has used judgment in arriving at the nonquantitative expressions for vari

Definition of the Audit Risk Model!

Answer the following questions to define the audit risk model and its components: 1.Define the audit risk model. 2.What is meant by control risk? What is the effect on the amount of evidence the auditor must gather and evaluate when control risk is decreased from high to low? 3.What is meant by inherent risk? Identify four

Entity and Assessment of Related Risks

Imagine that you're the Senior Auditor on the Peach Blossom Cologne Company audit. The Partner on the engagement comes into your office and tells you she's not satisfied with the memo that Jasper Parsons (the former Senior) wrote on Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement.

realizable value of accounts receivable

A portion of the current assets section of the December 31, 2010, balance sheet for Gibbs Co. is presented here: Accounts receivable $ 20,700 Less: Allowance for bad debts (3,500) $ 17,200 The company's accounting records revealed the following information for the year ended December 3

Company is California Water Services Group Audit report.

Obtain a 10-k report and an annual report for a public company (this may be in electronic form and/or hard copy form). Be sure that the 10-k report and the annual report are for the same fiscal year. In either document, locate the auditor's report for the financial statements only. This is a one-page report that is generally

Queues: Zimmerman's Bank, Paul Harrold's Styling Shop

D.1 Customers arrive at Paul Harrold's Styling Shop at a rate of 3 per hour, distributed in a Poisson fashion. Paul can perform haircuts at a rate of 5 per hour, distributed exponentially. a) Find the average number of customers waiting for haircuts. b) Find the average number of customers in the shop. c) Find the average t

Audit Risks in an Economic Downturn

Please help with the following problems regarding auditing. Provide at least 200 words in the solution. Discuss what you believe to be the most significant audit risk in an economic downturn. Based on the risk identified above, discuss how an auditor can minimize exposure related to this risk.

Gains on exchange of bond holder debt for preferred stock

Jefferson Corporation has $20,000,000 of 10% bonds outstanding. Because of cash flow problems, the company is behind in interest payments and in contributions to its bonds retirement fund. The market value of the bonds has declined until it is currently only 50% of the face value of the bonds. After lengthy negotiations, the pri

Create Audit Report

Cohen and Single, LLP, are auditing the ICFR and financial statements of Copley and Sons, a public company that sells supplies to government agencies.Copley and Sons has a 12/31 fiscal year end. Cohen and Single conclude that the financial statements for the current and prior year are fairly stated. However, they found a mat

Auditor Evaluate Results of Audit Procedures

How does the auditor evaluate the results of audit procedures? What types of qualitative factors might the audit consider when encountering an error? How might the results affect the audit conclusion?

Competence

7-34 (Objective 7-4) Seven different types of evidence were discussed. The following questions concern the reliability (competence) of that evidence: a. Explain why confirmations are normally more reliable evidence than inquiries of the client. b. Describe a situation in which confirmation would be considered highly reliable a

Based on the audit documentation guidelines from the PCAOB, discuss whether or not you believe these guidelines are adequate to protect a certified public accountant from a lawsuit that may be filed by shareholders of a company. Discuss any additional documentation that you believe should be required to protect a company's shareholders from potential financial harm.

Based on the audit documentation guidelines from the PCAOB, discuss whether or not you believe these guidelines are adequate to protect a certified public accountant from a lawsuit that may be filed by shareholders of a company. Discuss any additional documentation that you believe should be required to protect a company's s

Design Audit Model

Create your own design audit model that you may use to determine the extent to which your organization participates in design-principled practices. Write a analysis based on your audit findings, which include recommendations for improvement.

The Third Standard: Audit Field Work

1. What is the purpose of engagement planning? What critical information should the auditor consider during engagement planning? How will this information affect the scope of the audit? 2. What are the components of the audit risk model? How does the audit risk model affect an audit plan? 3. The third generally

Thinking about some of the scandals in the news over the last few years such as Enron, WorldCom, Adelphia, Bernie Madoff, etc., analyze and discuss the conditions that could have contributed to making these fraudulent activities possible. What warning signs were there that could have alerted an auditor to the risk of management fraud?

Thinking about some of the scandals in the news over the last few years such as Enron, WorldCom, Adelphia, Bernie Madoff, etc., analyze and discuss the conditions that could have contributed to making these fraudulent activities possible. What warning signs were there that could have alerted an auditor to the risk of management

Deposits in Transit, Outstanding Checks & Bank Reconciliation

Lowe Inc.'s bank statement from Western Bank at August 31, 2010, gives the following information. Balance, August 1 $16,600 Bank debit memorandum: August deposits 73,000 Safety deposit box fee $ 25 Checks cleared in August 66,678 Service charge 30 Bank credit memorandum: Balance, August 31 22,912

Confirming individual accounts receivable balances: Misstatements

In confirming individual accounts receivable balances, your client's customers reported the exceptions listed below. Which of these exceptions should be considered misstatements for evaluation purposes, assuming that misstatements are defined as (a) differences that affect the account balance and (b) differences that affect