Explore BrainMass
Share

You as the senior Internal auditor have just started an audi

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

You as the senior Internal auditor have just started an audit to verify that the payment of invoices matched the amount on the invoice. During the first day there three employees came to see your and related the following statement.

That stated that another employee had embezzled $35,634 dollars in the last 3 months. You run a quick review and find that there are some false invoices that have been paid.

What action do you take at this time?
What should be done with the employee that did this?
Any other thoughts and questions?

© BrainMass Inc. brainmass.com October 25, 2018, 5:07 am ad1c9bdddf
https://brainmass.com/business/auditing/you-as-the-senior-internal-auditor-have-just-started-an-audi-407534

Solution Preview

You as the senior Internal auditor have just started an audit to verify that the payment of invoices matched the amount on the invoice. During the first day there three employees came to see your and related the following statement.

That stated that another employee had embezzled $35,634 dollars in the last 3 months. You run a quick review and find that there are some false invoices that have been paid.

What action do you take at this time?
What should be done with the employee that did this?
Any other thoughts and questions?

Solution:

What action do you take at this time?

As the senior internal auditor, you need to relay the information to the person you report to. The CEO, CFO or Board of Directors would be sufficient options. Due to the fact that you are now aware that ...

Solution Summary

You as the senior Internal auditor have just started an audit to verify that the payment of invoices matched the amount on the invoice. During the first day there three employees came to see your and related the following statement.

That stated that another employee had embezzled $35,634 dollars in the last 3 months. You run a quick review and find that there are some false invoices that have been paid.

What action do you take at this time?
What should be done with the employee that did this?
Any other thoughts and questions?

$2.19
See Also This Related BrainMass Solution

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 various risk factors.
Situation
A B C D E
Desired audit risk Very low Very low Very low Very low Very low
Assessed inherent risk Maximum High Moderate Low Maximum
Planned assessed level of control risk Low High High Moderate High
Planned assessed level of analytical procedures Moderate Moderate Low Low High
Planned assessed level
of tests of details risk
Planned evidence

Required
a. Using the risk components matrix in Figure 9-4, determine the acceptable level of tests of details risk for each situation.

b. Rank the five situations from the most evidence required from substantive tests (1) to the least evidence required from substantive tests (5). You may have ties.

c. Explain your ranking of situation D.

View Full Posting Details