Practice Problems Ch. 16 (ACCT-422)

Practice Problems Ch. 16 (ACCT-422) - willing to send the...

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Solutions to Chapter 16 Practice Problems 16-20 a. (4) b. (4) c. (2) 16-21 a. (4) b. (2) c. (2) 16-22 a. (2) b. (1) 16-30 a. Yes, it is acceptable for the controller to review the list of accounts the auditor intends to confirm. The confirmations will be sent to the company's customers, and the auditor must be sensitive to the client's concern with the treatment of their customers. At the same time, if the client refuses permission to confirm receivables, the auditor must consider the effect on the audit opinion. If the restriction is material, a qualified or disclaimer of opinion may be needed. b. The auditor should be willing to perform special procedures that the client requests if the client is in agreement that these procedures may not necessarily be considered within the scope of the auditor's engagement. In the case of the 20 additional confirmations which the controller requested that the auditor send, the auditor should be
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Unformatted text preview: willing to send the confirmations; however, these confirmations should not be considered in the evaluation of the results of the accounts receivable confirmations sent by the auditor. c. If the auditor complies with the controller's request to eliminate six of the accounts from the confirmation tests, the auditor must perform alternative procedures on the six accounts and decide whether or not this omission is significant to the scope of the audit. If the auditor believes that the impact of not confirming these accounts is material, he or she must qualify the scope and opinion paragraphs of the auditor's report to indicate the restriction of scope imposed by the client. If the auditor believes that the impact of omitting the six accounts from testing is highly material, a disclaimer of opinion is appropriate....
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This note was uploaded on 04/11/2010 for the course ACCT 422 taught by Professor Blake during the Spring '10 term at MD University College.

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