Internal controls are designed and put into place to mitigate risks (anything that
can hamper the company from fulfilling its objectives.) Because risks exist, we
must design effective internal controls.
Entity-wide controls affect mul
AS8 Due: 9-46, 9-53, 9-71
March 10, 2015
Increasing in number of days sales in receivables and inventory in 2014. They
are also higher than their major competitor in 2014.
Increasing in receivables and inventory in 2014
AS5 Due: 7-35, 7-49, 7-50, 7-60
The audit report provides reasonable assurance that the financial statements are
free from material misstatements. The auditor is put in a difficult situation
AS6 Due: 3-36, 3-69, 3-72
Using COSOs updated Internal ControlIntegrated Framework define internal control and
describe important elements of the definition.
COSO defines internal control as:
AS4 Due: 5-53, 5-54, 5-56, 5-58,
Feb 3 2015
The American Institute of Certified Public Accountants (AICPA) is a historical
authority, as a self-regulatory profession, using statements on Auditing Standards,
AS3 Due: 4-50, 4-51, 4-60, 4-64
Utilitarian theory holds that what is ethical is the action that achieves the greatest good for the
greatest number of people. Actions that result in outcomes that fall sh
439 Section 1
A. They would win because they are the primary beneficiary and encounters the identified
B. They would win if the foreseeable user test is used in court
C. They would win if the foreseeable us
1. Why is fair competition important? What are ways to regulate competition?
Do you believe these regulations are ethical? Explain.
- Fair competition is important so all levels of businesses can compete with
one another, and to protect busines
Exam 3 Review Sheet
This document is to serve as a guide for you as you study for the third exam. The chapters
included on this test are Chapter 6, 7, 8 and 9.
Remember, for any journal entry we make in this class, you should be able to analyze how that
AS9 Due: 11-49, 11-66, 11-69
March 24 2015
a. The auditor makes test counts of selected items and records the test counts for subsequent tracing into the
clients inventory compilation.
b. The auditor take
Relevance means that the evidence addresses the assertion. For instance, observing
physical inventory addresses the existence of the inventory, but does not address the
disclosure or rights as
Ch 11 HW
A. Line expenses and restructuring reserve werent usually linked together.
They were two separate accounts handling two separate business processes.
B. Yes, of course. Anyone who is smart enough to d
Ch 12 HW
1A. Ensure existence and completeness of ledger
1B. If the controls are weak you will have to do more substantive testing to
ensure that they arent intentionally recording inventory that does not exist.
2A. Ensure appropriate valu
Ch 9 & 10 HW
A) Areas of risk include: AR, Inventory, and Sales. All of the previously
mentioned categories deviate significantly from the industry average and the
B) AR While AR for 2015 is only $2.6 million highe
Chapter 4 HW
A) Its likely the financial institution will win the litigation because they hired the
auditor (a licensed professional) to do a specific job that the auditor failed to
B) Unless the stockholder holds a majo
January 21, 2016
Chapter 2 Review Questions
The three most common ways perpetrators commit fraudulent financial reporting are
manipulation of accounting records, misrepresentation or omission of transactions, and
Ch 13 HW
Audit Program Zeitlow Corporation FY 2015
1. Inquire about and observe how stock transactions are handled
2. Agree balances to last years audit documentation
3. Confirm terms of stock authorizations are in line with corporate char
HW 4 CH 5
A). Pros having the same standards for both private and public companies
allows investors to trust the outcome of all audits across the board without
having to worry about different audit qualities. Auditors only need to learn on
March 3, 2016
Ch 6 Audit HW
Type of Procedure
Analytical Procedure Substantive
Inspection of Documentation Substantive
Inspection of Documentation Substantive
A). Performance Materiality The amount or amounts set by the auditor at less
than the materiality level for the financial statements as a whole or for particular
classes of transactions, account balances, or disclosures. The term is used wi
Acctg Assignment #12
AS12 Due: 14-70,14-83, 14-86, 14-113
This is a scope limitation that would cause the auditor to issue a qualified opinion or a
disclaimer, depending on the severity of the contingency.
The auditor sh
AS11 Due:13-47, 13-59, 13-60
March 31 2015
Examine articles of incorporation, the bylaws, and minutes of the board of
directors from inception to determine the provisions or decisions relating to the