Questions from Auditing and Assurance

Q: An attitude of independence is a most essential element of an audit

An attitude of independence is a most essential element of an audit by a firm of certified public accountants. Describe several situations in which the CPA firm might find it somewhat difficult to mai...

Q: Jane Lee, a director of a nonpublic corporation with a number

Jane Lee, a director of a nonpublic corporation with a number of stockholders and lines of credit with several banks, suggested that the corporation appoint as controller John Madison, a certified pub...

Q: Reed, CPA, accepted an engagement to audit the financial statements

Reed, CPA, accepted an engagement to audit the financial statements of Smith Company. Reed’s discussions with Smith’s new management and the predecessor auditor indicated the possibility that Smith’s...

Q: Provide an example in which a data analytics technique applied in financial

Provide an example in which a data analytics technique applied in financial statement auditing could serve as both a test of a control and a substantive procedure.

Q: Sally Adams is an audit manager for the firm of Jones &

Sally Adams is an audit manager for the firm of Jones & Smith, CPAs, and is assigned to the audit of Libra Fashions, Inc. Near the middle of the audit, Sally was offered the job of Libra’s chief finan...

Q: Roger Royce, CPA, has encountered a situation that he thinks

Roger Royce, CPA, has encountered a situation that he thinks may pose a threat to his independence with respect to Watson, Inc., an audit client. The situation is not addressed by an independence rule...

Q: Jenko Corp. is an audit client of the Phoenix office of

Jenko Corp. is an audit client of the Phoenix office of Williams and Co., CPAs. Williams and Co. has offices in Arizona, including ones in Phoenix, Tucson, and Tombstone. For purposes of independence,...

Q: The firm of Williams, Kline & Chow, CPAs, is

The firm of Williams, Kline & Chow, CPAs, is the auditor of Yuker Corporation, a nonpublic company. The president of Yuker, Karen Lester, has been putting pressure on Chee Chow, the audit partner, to...

Q: Tracy Smith, CPA, is in charge of the audit of

Tracy Smith, CPA, is in charge of the audit of Olympic Fashions, Inc. Seven young members of the public accounting firm’s professional staff are working with Smith on this engagement, and several of t...

Q: Ron Barber, CPA, is auditing the financial statements of DGF

Ron Barber, CPA, is auditing the financial statements of DGF, Inc., a publicly held company. During the course of the audit, Barber discovered that DGF has been making illegal bribes to foreign govern...