Question
In: Accounting
-According to your textbook, auditors have to make judgments concerning materiality on every audit. Since the...
-According to your textbook, auditors have to make judgments concerning materiality on every audit. Since the auditing standards give no formal guidance for how to determine materiality, auditors must rely on their own experience. Determine at least three qualitative factors that affect the auditor's judgment. Provide a rationale for your response.
-According to the textbook, auditors rely on the audit risk formula to determine the types and amount of audit evidence to collect in order to keep the overall audit risk of engagements to a minimum or below defined tolerable limits. Suggest an alternative to the audit risk equation in order to mitigate audit risk. Support your rationale with examples of the successful use of the alternative strategy.
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Expert Solution
-According to your textbook, auditors have to make judgments concerning materiality on every audit.
ekkarill92 answered 1 year agoRelated Solutions
Auditors must make judgments about various aspects of an audit on the basis of their own...
Auditors must make judgments about various aspects of an audit
on the basis of their own direct experience, indirect experience,
or a combination of the two. In a study, auditors were asked to
make judgments about the frequency of errors to be found in an
audit. The judgments by the auditors were then compared to the
actual results. The data are contained in the Excel Online file
below. Suppose the data were obtained from a similar study; lower
scores indicate...
Auditors must make judgments about various aspects of an audit on the basis of their own...
Auditors must make judgments about various aspects of an audit
on the basis of their own direct experience, indirect experience,
or a combination of the two. In a study, auditors were asked to
make judgments about the frequency of errors to be found in an
audit. The judgments by the auditors were then compared to the
actual results. The data are contained in the Excel Online file
below. Suppose the data were obtained from a similar study; lower
scores indicate...
According to your textbook, to minimize the risk of material misstatement, auditors seek third-party verification of...
According to your textbook, to minimize the risk of material
misstatement, auditors seek third-party verification of account
balances by mailing customers their statements. Discuss the
advantages of positive and negative confirmations, and ascertain
whether or not email and oral confirmations are acceptable to
increase customer response rates. Support your position.
Discuss the key differences between substantive tests of
transactions and substantive tests of balances. Next, identify at
least two situations when an auditor should test account balances.
Support your rationale...
Misstatements that exceed quantitative materiality thresholds can have large impacts on the judgments of financial statement...
Misstatements that exceed quantitative materiality thresholds
can have large impacts on the judgments of financial statement
users. However, even quantitatively small misstatements can be
material for qualitative reasons. List three
qualitative factors that would suggest that a misstatement
is material, even if the magnitude of the misstatement falls below
the quantitative materiality thresholds of planning materiality and
tolerable misstatement.
In their work on accounts receivable and elsewhere in an audit, the independent auditors often make...
In their work on accounts receivable and elsewhere in an audit,
the independent auditors often make use of confirmation requests.
a. Why is the confirmation of accounts receivable a mandatory audit
procedure? Explain. b. Discuss the situations in which negative
confirmations apply
Your audit team has set the following benchmarks and percentages for the calculation of materiality for...
Your audit team has set the following benchmarks and percentages
for the calculation of materiality for the financial statement as a
whole of a client you are auditing:
Value
%
Profit before
tax
5
Profit after
tax
5 – 10
Gross
Profit
0.5 – 1
Revenue
0.5 – 1
Total
Assets
1 – 2
Net
Assets
2 – 5
During the audit the following items listed (1 –...
audit problem Your preliminary judgment about materiality. apply with a company such as tjmaxx (it would...
audit problem
Your preliminary judgment about materiality. apply with a company
such as tjmaxx
(it would relate to the annual report, 10-k, and looking on the
income statement)
Since your first birthday, your grandparents have been depositing $1200 into a savings account on every...
Since your first birthday, your grandparents have been
depositing $1200 into a savings account on every one of your
birthdays. The account pays 6% interest annually. Immediately after
your grandparents make the deposit on your 18th birthday, the
amount of money in your savings account will be closest to
________.
Group of answer choices
$ 21,600.00
$ 12,993.12
$ 41,632.67
$ 44,504.14
$ 22,252.07
$ 37,086.78
Since your first birthday, your grandparents have been depositing $100 into a savings account every month....
Since your first birthday, your grandparents have been
depositing $100 into a savings account every month. The account
pays 9% interest annually. Immediately after your grandparents make
the deposit on your 18th birthday, the amount of money in your
savings account will be closest to ________.
Select one:
$32,181
$64,362
$53,635
$75,089
According to your textbook, “A budget can have a significant impact on human behaviour…Participative budgeting can...
According to your textbook, “A budget can have a
significant impact on human behaviour…Participative budgeting can
foster budgetary “gaming”… a budget can be a manager’s friend or
foe”.
Required:
Critically evaluate the issues raised in the above
excerpt.
b) Return on Investment (ROI) is commonly used to
measure divisional performance and awards bonuses to divisional
management based on their division’s performance.
Describe two examples on how a manager can improve
his/her division’s ROI, but which may harm the future
competitiveness...
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