ACL CASE STUDY
Audit Command Language (ACL), is one of the audit software program, which allows auditors
and accountants to extract and analyze data independent of programmers and auditees that provides
them to summarize large amounts of data
Firstly, Mattel Toy Manufacturing Company had experienced several years of good
business. Income had increased steadily, and the common stock was a favorite among investors.
However, business turned worse instead of better. Becau
GE: How Much Are Auditors Paid?
1. From a conceptual standpoint, how do the requirements of Sarbanes-Oxley related
to non-audit services affect perceptions of the auditors' independence?
1.Sarbanes-Oxley seems to better the perceptions of audit
Answer Chapter 2
Audit procedures can be classified into the following categories. The purpose of an audit procedure determines whether it is a risk assessment
procedure, test of controls, or substantive procedure. Using audit procedures to gain an
Answer 6.55: When we investigate bank statement (Exhibit 6.6) we can see misstatement. At the
first glance, the bank statement has been altered. Because, it is written You subtracted 26 withdrawals
for 10,838.29 but at the bottom of the bank statement doc
Answer 6.63: (Parmalat Case)
What steps does an auditor ordinarily take when confirming cash balances held
on deposits with financial institutions?
According to AU 330; Confirmation is the process of obtaining and evaluating a direct
ZZZZ Best Case
1. When we look at the case, there is a big difference between a quarterly review and an annual audit.
Quarterly reviews are usually just questions about the business, any changes, any large transactions and
an analytical review (fluctuatio
Internal Control Questionnaire Items
8. Are authorizations for deduction
signed by employees on file?
10. Is a time clock or other
15. Are Unclaimed wages deposit in a
special bank account or othe
Problem 21 (Chapter-10):
For each component of the damages estimate indicate what documents,
accounting record or other information you would need to review to evaluate the validity
and the amount of the item.
Cost to sandblast and recoat shipping cont
Horizontal Analysis Overview
Horizontal analysis is the comparison of historical financial information over a series of reporting
periods, or of the ratios derived from this financial information. The intent is to see if any numbers are
Answer Chapter 2
2.64: The general, field work, and reporting standards (the 10 standards) approved and adopted by the membership of the AICPA, as
amended by the AICPA Auditing Standards Board (ASB), are as follows: General Standards However, in the quest
1. Consider the principles, assumptions and constraints of Generally Accepted
Accounting Principles (GAAP). Define the revenue recognition principle and explain
why it is important to users of financial statements.
In accrual basis accounting s
PHAR-MOR, INC.: ACCOUNTING FRAUD, LITIGATION AND AUDITOR LIABILITY
Some of the members of Phar-Mors financial management team were former auditors
of Coopers & Lybrand
a) Why would a company want to hire a member of its external audit team?
Answer 1: The matching principle is part of the set of standards belonging to GAAP. It follows
accrual accounting and means that costs must be matched with revenue. The matching principle defines
how accountants should recognize expenses.
2.69 Evaluating Quality Control [LO 2-5]
a) What are the characteristics of PCAOB inspections?
Inspections are conducted by individuals chosen by the PCAOB who are full time employees of
the PCAOB. The inspections consist of a review
Homework Chapter 3
3.54 Auditing Procedures [LO 3-4]
The eight general audit procedures used to gather evidence are:
1) Inspection of records and documents (vouching, tracing, scanning)
Example: Documents prepared by outside part
Chapter 6 Homework
Per the bank statement in Exhibit 6.6, check # 2233 is missing.
Based on a manual calculation of the previous balance ($7,559.06) + deposits ($5,654.16)
withdrawals ($10,838.29) the current balance should
Chapter 6 Homework
1. What steps does an auditor ordinarily take when confirming cash balances held on
deposits with financial institutions?
Auditors are to confirm the bank balances by standard bank confirmation inquiry or e
Answer Chapter 6.55
In the given question text, we acknowledged that all the checks has been
recorded to the companys books. In the question stated, that all the checks
cleared by the bank.
According to the companys bank statement there is unclear situati
LIMITATIONS AND THE ROLE OF EXTERNAL
AUDITING: A FOCUS ON 2008 FINANCIAL CRISIS
2008 CRISIS IN NUMBERS
This recession was the worst since the Great Depression:
Gross Domestic Product: Estimated at about $2.6 TRILLION
LOSS. (IMF MARCH 2009 ESTIMATE OF THE
Q5) Eds wife Diane owns a printing business in town. Ed works in the accounts payable
department of Jiffy Abs Vitamin Company. Diane prints invoices for work supposedly done
for Jiffy Abs (no actual work was performed) and Ed places the invoice in the app
Answer Chapter 7.65
In the Mattel case, the main problem of the company faced with derives from
the bill and hold preference. In this case, we can define the bill and hold
process as; Mattel does not ships the toys to the buyers, but the Mattel has
Answer Chapter 6.63
In general, banks do not prefer to release the information of their customers.
The auditors prefer to fax to the banks for reaching the results shorter than
normal audit process. I assume that they thought it would be easier and
Answer Chapter 5.68: a)
Possible Error or Fraud Due
We should only allow on this
situation if the employee has
Are authorizations for Deduction signed by
Answer Chapter 3.54: In general, auditors use eight general audit
procedures to gather evidence:
The most reliable form of documentary evidence is external which
means that document was
Answer Chapter 4.55: As stated in the question, we need to scrutiny at the
clients financial statements to Analytical Procedure perspective. During the
Analytical Procedure, we need to follow five steps to complete the Analytical
Develop an e
Answer Chapter 2.64: The general, field work, and reporting standards (the
10 standards) approved and adopted by the membership of the AICPA, as
amended by the AICPA Auditing Standards Board (ASB), are as follows:
General Standards However, in the questio
Problem 29 (Chapter-7): How could it be determined whether the Internet payments
are the basis for a money laundering scheme?
Today, global network can be used with modern methods of payment via the Internet.
Therefore, new payment instruments such as ele
1) According to the GAAPs revenue recognition principle, revenue must be
both earned and realized or realizable before it is recognized. In another
perspective of accounting, the product must have been delivered or service
ordered by the custom