unit 2- Project-Advance Forensic accounting

unit 2- Project-Advance Forensic accounting - perpetrate...

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AC 465-01 Unit 2 Project Exercise 1-28: What is meant by the forensic-type field work phase of an audit? The forensic-type fieldwork phase of an audit does not mean converting a traditional audit to a fraud audit. The characterization of the phase of an audit as a forensic-type phase seeks to convey an attitidtional shift in the auditor's degree of skepticism. At this phase, auditors should modify the otherwise neutral concept of professional skepticism and presume the possibility of dishonesty at various levels of management, including collusion, override of internal control and falsification of documents. The key question that auditors should ask is “Where is the entity vulnerable to financial statement fraud if management were inclined to
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Unformatted text preview: perpetrate it?'' In this phase, auditing standards should require performance of substantive tests directed at the possibility of fraud, including tests to detect the override of internal controls by management. The tests should be centered on the balance sheet date for balance sheet accounts and throughout the year (including the latest quarter) for income statement accounts. Exercise1-30: An AICPA Fraud Task Force suggest that if a forensic accountant is brought into an audit to conduct a separate investigation (and not an adjunct to an audit), what standards apply? The forensic accountant should apply the AICPA consulting standards....
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