ich ONE of the following should be carried
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- Refer to Exhibit 2.5 and answer the following questions. a. (Sections 101, 104, and 105) How does the establishment and operation of the PCAOB help to ensure quality external audits? How will audit firm inspections and investigations by the PCAOB help ensure high audit quality? b. (Sections 201-203) How do Sections 201-203 address audit ()r independence concerns? c. (Section 206) What is a cooling-off period, and how does it address auditor independence concerns? d. (Section 301) How do the audit committee requirements help ensure effective corporate governance? e. (Sections 302 and 906) How do the officer certification requirements help to address the risk of fraud in publicly traded organizations? What is the likelihood that a CFO who is committing fraudulent financial reporting would sign the certification falsely, and what are your reactions to that possibility? f. (Section 401) How does this section relate to the Enron fraud? g. (Section 404) How do the management assessment and audit or attestation of internal controls contained in this section help to address the risk of fraud in publicly traded organizations? h. (Section 407) Why is it important that at least one member of the audit committee be a financial expert? What are the financial reporting implications if the audit committee does not have any individuals serving on it who possess financial expertise? i. (Section 802) How does this section relate to the Enron fraud?Question 9 In making a decision of whether to take on a new audit client, the auditor should perform all of the following except: 1. Reviewing the credit rating of the proposed client. 2. Performing preliminary tests of internal controls. 3. Evaluating the firm's ability to service the client properly. 4. Inquiring of third parties as to the reputation of the proposed client. 3 O 1 O 2 O 4Question 5 a) List and briefly the main threats to independence and objectivity as identified in IESBA's Code of ethics for Professional Accountants, for each threat you should give an example. b) Briefly explain the fundamental principle of confidentiality and list the circumstances in which obligatory and voluntary disclosure of Information may be applicable. Professional accountants are often involved in many different types of work ranging from performing the external audit to providing wider assurance services. Where an external audit is carried out the auditor required to give an opinion as to whether the financial statements present fairly the activities of the business over a period of time. c) Explain the concept of true and fair presentation.
- 18 An Independent Auditor is an outsider to an entity. He had to plan out his action seriously and thoroughly. Out of the seven steps in the process of audit which will be his first step from the options given below? a. Drafting a Report b. Scheduling an open meeting c. Requesting financial documents d. Preparing an audit plan Clear my choiceQuestion 2 When a company has to go through the audit process, an auditor may use the term "audit engagement." This can mean different things, so it is important that the auditor clarifies what he means when he uses the term. Regardless of which definition the auditor follows, the auditor will always follows specific procedures and guidelines for handling the engagement. An audit engagement very loosely refers to an audit that an auditor performs. More specifically, it refers only to the initial stage of an audit during which the auditor notifies the client he has accepted the audit work and clarifies his understanding of the audit's purpose and scope. Even more specifically, the term audit engagement can refer to the written letter by which the auditor formally notifies the client that he will engage in audit services. You are required to discuss the three steps that are involved in performing the engagement during an audit.QUESTION 2 The purpose and objective of an auditor is to form opinions on whether the operations of an entity are effective and efficient and if financial statements are reliable and do not contain any material misstatements. Once an audit is accepted by an auditor they will need to gather evidence that is sufficient and reliable which will support any opinions that are made by the auditor. The audit process is a logical and systematic process which is planned and implemented in accordance to the audit standards. a) Prior to the audit conducting an audit there are stages which need to be followed. What are these stages? b) There are two requirements which should be fulfilled prior to the acceptance of an engagement which is to establish if the pre-conditions of the audit exist and ensuring that there is a mutual understanding which is present between management, the auditor and individuals who are in charge of governance of the audit engagement. What are the two pre-conditions of an…
- 5. All of these reasons are important to discuss the types of service with management before performing the audit work, except ___________ Question 5 options: a) To avoid misunderstanding b) To charge more audit hours and fees c) To prepare the auditor for the job d) To determine the audit procedures requiredQuestion 19 If an auditor believes that a misstatement might be intentional and the effect on the financial statements could be material the auditor should do which of the following? Resign from the engagement Discuss with the audit committee what should be done to prevent possible future future misstatements. Perform additional procedures to obtain additional evidence to determine whether fraud has occurred or is likely to have occurred and whether there is a material impact on the financial statements. Contact local authorities.1. Johnson & Johnson CPAs, is considering accepting an engagement to perform an audit for a new client, whose prior period financial statements had been audited by another CPA. Johnson & Johnson would like to make certain that they understand the auditor's objective in conducting an initial audit engagement. Which title of Professional Standards addresses this issue , and, will be helpful in understanding the auditor's objectives in conducting an initial audit engagement? Enter the exact section and paragraph with helpful information.
- QUESTION 1 Registered auditors have skills and knowledge to perform their functions and they should be completely honest in performing their functions. The following actions taken by registered auditors are examples of non-compliance with one or more of the fundamental principles. Required: Identify with explanations which of the fundamental principles belonging to the SAICA Code of Professional Conduct have not been complied with in each of the situations described below: a) Randy Rice the registered auditor in charge of the Perry Sauce (Pty) Ltd audit, made racist comments concerning the clients staff during an audit planning session. b) Jerry Jan the registered auditor in charge of the audit of Dribble Drabble (Pty) Ltd, charged the client a fee for audit procedures which he knew had not actually been carried out. c) Tolly Ted a registered auditor, arranged with some of his clients to pay the fees which he charged for his services in cash. Any client agreeing to do so was not…Question 8 Which of the following is not an example of the application of professional skepticism? 1. Designing audit procedures to obtain reliable evidence in support of a particular financial statement assertion. 2. Obtaining corroboration of management's explanations through consultation with a specialist. 3. Inquiring of prior year engagement personnel regarding their assessment of management's honesty and integrity. 4. Using third-party confirmations to provide support for management's representations. O 1 O 2 O 3 O 44. The letter an auditor prepares and ensures he signs with the management to set out the terms and conditions of the assurance engagement is called? ______________ Question 4 options: a) Professional letter b) Assurance letter c) Engagement letter d) Auditor letter
