Questions from Auditing and Assurance

Q: Visit the SEC’s website (www.sec.gov) and

Visit the SEC’s website (www.sec.gov) and identify a company that has been recently cited for revenue recognition problems. Prepare a memo summarizing the revenue recognition issues for the company.

Q: If the independent auditors decide that it is efficient to consider how

If the independent auditors decide that it is efficient to consider how the work performed by the internal auditors may affect the nature, timing, and extent of audit procedures, they should assess th...

Q: During the initial planning phase of an audit, a CPA

During the initial planning phase of an audit, a CPA most likely would a. Identify specific internal control activities that are likely to prevent fraud. b. Evaluate the reasonableness of the entity’s...

Q: Baker, CPA, was engaged to audit Mill Company’s financial statements

Baker, CPA, was engaged to audit Mill Company’s financial statements for the year ended September 30. After studying Mill’s internal control, Baker decided to obtain evidence about the effectiveness o...

Q: As generally conceived, the audit committee of a publicly held company

As generally conceived, the audit committee of a publicly held company should be made up of a. Representatives of the major equity interests (preferred stock, common stock). b. The audit partner, the...

Q: When planning an audit, an auditor should a. Consider

When planning an audit, an auditor should a. Consider whether the extent of substantive procedures may be reduced based on the results of tests of controls. b. Determine overall materiality for audit...

Q: Which of these statements concerning illegal acts by clients is correct?

Which of these statements concerning illegal acts by clients is correct? a. An auditor’s responsibility to detect illegal acts that have a direct and material effect on the financial statements is the...

Q: The engagement partner and manager review the work of engagement team members

The engagement partner and manager review the work of engagement team members to evaluate which of the following? a. The work was performed and documented. b. The objectives of the procedures were ach...

Q: Tolerable misstatement is a. The amount of misstatement that management

Tolerable misstatement is a. The amount of misstatement that management is willing to tolerate in the financial statements. b. Materiality for the balance sheet as a whole. c. Materiality for the inco...

Q: Which of the following would an auditor most likely use in determining

Which of the following would an auditor most likely use in determining overall materiality when planning the audit? a. The anticipated sample size of the planned substantive tests. b. The entity’s inc...