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Auditing and Assurance Services: Evaluating Results

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Objective: Evaluate Results

Mel Adams is a partner in a medium-sized CPA firm and takes an active part in the conduct of every audit he supervises. He follows the practice of reviewing all audit files of subordinates as soon as it is convenient, rather than waiting until the end of the audit. When the audit is nearly finished, Adams reviews the audit files again to make sure that he has not missed anything significant. Because he makes most of the major decisions on the audit, there is rarely anything that requires further investigation. When he completes the review, he prepares a draft of the financial statements, gets them approved by management, and has them assembled in his firm's office. No other partner reviews the audit documentation because Adams is responsible for signing the audit reports.

Problem:

a) Evaluate the practice of reviewing the audit files of subordinates on a continuing basis rather than when the audit is completed.
b) Is it acceptable for Adams to prepare the financial statements rather than make the client assume the responsibility?
c) Evaluate the practice of not having a review of the audit documentation by another partner in the firm

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This solution describes auditing and assurance services.

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a) Evaluate the practice of reviewing the audit files of subordinates on a continuing basis rather than when the audit is completed.
Reviewing the audit files of subordinates on a continuing basis rather than when the audit is completed is a good approach for following reasons:
1. It helps the auditors to make suitable changes in their audit ...

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