The Third Standard: Audit Field Work
Not what you're looking for?
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 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 between underlying accounting data and all corroborating information available to the auditor. What presumptions can be made about the following?
- The relative competence of evidence obtained from external and internal sources.
- The role of internal control with respect to internal evidence produced by a client's data processing system.
- The relative persuasiveness of auditor observation and recalculation evidence compared to external, external-internal, and internal documentary evidence.
Purchase this Solution
Solution Summary
This answer offers cogent arguments relating to engagement planning in approximately 800 words.
Solution Preview
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?
The purpose of engagement planning is to develop an understanding of the business whose accounts have to be audited, the methods used in the business, the problems with those methods, and the controls used by the business. This inspection and evaluation of the business enables the auditor to set up auditing objectives and correctly prepare the audit program.
During the engagement planning the auditor should ascertain the needs of the report users, the importance of the programs to be audited, the potential for fraud, the potential for violations of laws and regulations, the results of previous audits, and the accessibility of data that can be used as evidence.
Scope of audit: During the engagement planning stage the audit objectives are set and responsibility assigned to different members of the audit team. This information helps determine the range of activities that will be performed by the auditor and the period of records that are to be used for making audit examination.
2. What are the components of the audit risk model? How does the audit risk model affect an audit plan?
The components of the audit risk model are the inherent risk, which is the ...
Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Introduction to Finance
This quiz test introductory finance topics.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.