Describe how users of the financial statements may benefit from.docx
1. Describe how users of the financial statements may benefit from
ASSIGNMENT3-27 (OBJECTIVES 3-3) PCAOB Rule 3211, Auditor Reporting of Certain Audit
Participants, requires that an audit firm file a form, referred to as Form AP, for each initial
issuance of an auditreport. On Form AP, the audit firm discloses the name of each audit
engagement partnerwho participated in the audit, as well as the names and locations of any
other audit firmsparticipating in 5 percent or more of the audit engagement. The total
number of audit firmsparticipating in less than 5 percent of the audit engagement, as well as
the overall percentageof audit hours contributed by these firms, are also required to be
disclosed. Access the text-book website to obtain the file “PCAOB Form AP Data” that
includes data obtained from thePCAOB’s AuditorSearchSM database and the related data
dictionary. Sort the dataset by fiscalperiod date to obtain the subset of Form AP filings for
audits of financial statements that hada fiscal year end anytime during 2017 to complete the
following:a. How many Form APs relate to 2017 audits?b. What is the name of the individual
who served as the engagement partner for NordstromInc.? What other engagement(s) did
that individual also serve as engagement partner?c. Which global audit firm had the highest
number of Form AP filings for 2017 audits(Note: Some of the global firms have more than
one firm ID number)? How manyForm APs were filed by that firm on a global basis? How
many of those Form APsrelate to the U.S.-based practice of that firm?d. For which firm did
Joseph D’Introno work in 2017? How many AP forms were filed for himfor 2017 audits?
What type of public company audit clients did he mostly serve in 2017?e. How many Form
APs relate to partners in the Atlanta Office of Ernst & Young, LLP?3-28 (OBJECTIVES 3-3, 3-
9) The PCAOB’s recently revised auditor reporting standard includes arequirement for the
auditor to communicate critical audit matters. Critical audit matters includethose matters
during the audit that involved difficult, subjective, or complex auditor judgmentsor that
posed difficulty to the auditor in obtaining sufficient appropriate evidence or in formingthe
opinion on the financial statements. Similarly, the International Auditing and
AssuranceStandards Board (IAASB) recently revised the auditor’s report in the ISAs to
require auditorsto communicate key audit matters. Key audit matters include
communication of similar kinds of information as noted by the PCAOB such as areas of
higher assessed risk of material misstatment and the effects of significant events or
transactions that occurred during the period.a. Describe how users of the financial
statements may benefit from communicationsabout these matters in an audit report.b.
Describe how communication of these matters may not be beneficial to users of thefinancial
statements.c. What difficulties, if any, may auditors face in communicating about these
2. matters?3-29 (OBJECTIVES 3-1, 3-3, 3-7, 3-9) The IAASB recently revised its standards
related to auditreporting. ISA 700 (Revised), Forming an Opinion and Reporting on
Financial Statements, re-quires the auditor’s report to include the following paragraphs
under the headings “Basisfor Opinion” and “Auditor’s Responsibilities for the Audit of the
Financial Statements”:
