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External Auditing

Audit Risk and Third Parties

I need some help answering these questions on auditors and third party relationships: 1. When assessing audit risk, should auditors consider the type and number of third parties that may ultimately rely on the client's financial statements? 2. Should auditors insist that audit engagement letters identify the third parties

Errors That Could Occur from Control Weaknesses

9.83 ICQ Items: Errors That Could Occur from Control Weaknesses. Refer to the internal control questionnaire on a payroll system (Appendix 9A.3 - see below) and assume the answer to each question is "no." Prepare a table matching the questions to errors or frauds that could occur because of the absence of the control. Your col

Strang Corporation

During the year, Strang Corporation began to encounter cash flow difficulties, and a cursory review by management revealed receivable collection problems. Strang's management engaged Elaine Stanley, CPA, to perform a special investigation. Stanley studied the billing and collection cycle and noted the following. The accountin

What are the advantages and disadvantages of sampling?

E.54 Basic Sampling: Comprehensive. Reagan is considering opening a multipurpose hardware and lawn store in Anytown, USA. Based on his knowledge of the industry, he feels that if the average household income is greater than $35,000, the store will ultimately be successful. He was planning on attempting a census of the income lev

Mgmt assertions

What are management assertions? How do they affect the financial statements? How does the auditor formulate audit objectives based on management assertions?


Explain the difference between auditing around the computer, through the computer, and with the computer. Do you think it is possible to conduct a thorough audit by auditing around the computer? Is it ever efficient to audit without a computer?