Question

Assume you currently work at a CPA firm. During the assessment of internal controls, your firm concluded that your publicly traded client did not have accounting staff who met the firm’s criteria for having adequate accounting expertise to ensure the company’s financials were prepared in compliance with appropriate accounting principles. This was identified as a material weakness and an adverse opinion was issued. In a PowerPoint presentation, prepare information to further train the audit team on how to handle issues, which includes: the communication that is required with the client. the actions that the client must take to mitigate the weakness. the course of action your firm should take as it relates to the financial audit. After the report had been issued, assume that the client hired a CPA with extensive reporting experience to manage the accounting department. What part does this hiring decision play, if any, in your firm’s decision? Your presentation should meet the following criteria: Be 6-8 slides in length, not including the title and reference slides.

Answer 1

solution

Correspondence required with customer

Auditor ought to discuss every critical finding with Client's administration expressed as beneath:

1.Views about critical subjective parts of the element's bookkeeping work on, including bookkeeping approaches, bookkeeping gauges and monetary revelation.

2.Significant troubles, if any experienced amid review

3.Significant issues emerging from the review that were examined, or subject to correspondence with the executives.

4.Written portrayal the auditor is asking.

5.Circumstances that influence the frame and substance of review report.

6.Any other critical issue that in expert judgment, are noteworthy to money related revealing procedure.

Move that customer must make to alleviate shortcoming:

•As inside controls are set up to guarantee unwavering quality of bookkeeping frameworks moreover. remembering about this, Accuracy and dependability are imperative for bookkeeping world and keeping in mind that doing consistence with fitting bookkeeping strategies.

•Foremost activity ought to contract of experienced and good bookkeeping staff according to customer's enrollment arrangements.

•Client ought to have suitable command over division od obligations as indicated by their individual capability.

•Client must approach controls like login, passwords, lockouts.

•Proper support of archives utilized for money related exchanges, for example, solicitations, costs reports and so on.

•Using twofold passage bookkeeping framework improves dependability by guaranteeing that books are constantly adjusted.

•Periodic reconcilations which can uncover mistakes and discrepencies.

•Approval expert requires explicit administrators to approve particular sorts of exchanges which additionally enhances dependability to such exchanges.

Strategy inspector must take:

1.Decide extent of review

2.Define review destinations.

3.Set the important benchmark to assess topic reliably and sensibly

4.Understanding the customer's huge inward controls

5.Consider Materiality in both subjective and quantitative terms.

6.Risk Assessment is a fundamental part in playing out a review

7.Planning and performing review techniques

8.Gather adequate suitable review proof

9.Evaluate review proof as these confirmations are to be utilized in planning of fiscal summaries

10.Proper documentations of review proof backings ends and affirms that review has been led as per important measures.

11.Communication with customers all through the review procedure will assist inspector with making review process all the more viably and effectively.