Reference no: EM133154620
ESSAY QUESTIONS
1. Before accepting an audit engagement, an auditor must assess the RISK of Material MISSTATEMENT OR FRAUD in individual accounts and in general the financial statements as a whole.
a. How does the auditor assess the risk in Cash and Cash Equivalents Account? Briefly outline some of the steps the auditor will take.
b. How might the result of theHIGH risk assessment in (a) above help the auditor in planning, designing the audit program and its implementation? Briefly describe:
i. planning an audit,
ii. designing an audit program, and
iii. implementing an audit program.
2. Public Auditors face several professional liabilities. The liabilities are: Contract Law; Common Law and Statutory Law. What do you understand by liability under each of these laws? Briefly explain.
3. Auditing Standards for Public Accountants are set in USA by : AICPA, PCAOB, and IAASB.
a. What do the above abbreviations stand for?
b. What are the three most important objectives expected to be accomplished by an auditing standard on Property, Plant and equipment from the investors' point of view who relies on the Balance Sheet of a corporation?
c. Public Auditors must consider the assertions made by Management in the Financial Statements and the Notes to those Financial Statements.
i. What are assertions?
ii. How many types of assertions must the auditor consider?
List them and do not discuss them
4. Audit Evidence is at the Core of opinion formulation after conducting an audit.
a. What do you understand by substantive audit evidence?
B. Why is proper and relevant evidence documentation critical in forming an audit opinion?
5. An auditor is expected to obtain sufficient and appropriate audit evidence before forming an opinion.
a. What do you understand by audit sufficiency? Briefly explain.
b. What do you understand by the appropriateness of audit evidence?
c. How will lack of sufficient and appropriate evidence result in a qualified opinion in an audit report? Be specific and to the point.