INTERNATIONAL STANDARD ON AUDITING 200 (REVISED)
OVERALL OBJECTIVES OF THE INDEPENDENT AUDITOR AND THE
CONDUCT OF AN AUDIT IN ACCORDANCE WITH INTERNATIONAL
STANDARDS ON AUDITING
INTERNATIONAL STANDARD ON AUDITING 200 (REVISED)
OVERALL OBJECTIVES OF THE INDEPENDENT AUDITOR AND THE
CONDUCT OF AN AUDIT IN ACCORDANCE WITH INTERNATIONAL
STANDARDS ON AUDITING
QuestionsNone of these questions has a style component, .docxcatheryncouper
Questions
None of these questions has a style component, thus you don't have to write in complete sentences and well-formed paragraphs. You can use lists where appropriate if you want.
You are a partner in a medium-sized, regional CPA firm and have been approached by XYZ, Inc., a relatively small, public company, to do their audit for next year. XYZ is registered with the SEC and has filed audited 10-Ks for the last 10 years since they went public. They haven't indicated why they are switching auditors.
XYZ specializes in developing shale gas using fracking technology. Fracking technology involves drilling wells into shale formations and injecting high pressure water containingspecial chemicals into the well to fracture the shale formation and release the trapped natural gas.
You and your firm currently are members of the AICPA. All the partners and managers are licensed CPAs in the state of New Mexico and also members of the AICPA. Your firm has limited experience with oil and gas extraction and has no other fracking clients. However, your firm has offices that can cover the physical locations where the prospective client does business.
a) Develop a checklist of five areas or issues that you would want to research before you accepted this firm as an audit client. For each area or issue, explain why you would want to research it and give an example of where you might go to get some information about each issue.
i) Issue 1 - Royalty: The royalty is to be paid by the lessor without any deductions for the cost of the drilling or production and royalty is negotiable, therefore it should be assessed.
ii) Issue 2 – Bonus: The bonus is to be paid to the lessor as consideration for execution of the lease. It should be expressed as a fix dollar amount per net mineral acre.
iii) Issue 3 – Post production Cost: Taking into consideration if royalty is based on pricing received by the company, the post production cost should also be revised or checked to be computed.
iv) Issue 4 - Lease Terms: It’s imperative to be able to understand how the lease term function in this particular industry such as oil and gas. Not to mention, the time period of lease to be able to identify and understand the ongoing concerns.
v) Issue 5 – Safety Management: The need of the study of safety management system being adopted by the company in regards to employee involvement, safety training, hazard identification, management of labor and control.
b) Describe two reasons why a firm like this firm would want an audit even if they were not required to do so by the SEC. I am looking for substantive reasons that show you understand the importance of auditing in capital markets and why possible stakeholders like lenders and investors would want a firm like this to have an audit.
Reason 1: The firm and it’s auditors are very capable and have been permitted by the states to perform the external audit and not to mention, can perform the audit responsibil ...
Question 1 1. The American Institute of Certified Public Account.docxmakdul
Question 1
1. The American Institute of Certified Public Accountants (AICPA), the Public Company Accounting Oversight Board (PCAOB), and the International Auditing and Assurance Standards Board (IAASB) have a common goal to:
Verify that the financial statements are free from material errors.
Verify that the financial statements are free from all errors.
Provide financial information to disinterested third parties.
Provide assurance to the public that audits are conducted in a professional manner.
5 points
Question 2
1. How many countries rely on the standards issued by the International Auditing and Assurance Standards Board?
25
Over 100
Only the European countries.
The twelve countries in North America.
5 points
Question 3
1. Which phase of the audit formulation process contains management's assertions of rights and obligations for their manufacturing facilities?
Phase I
Phase II
Phase III
Phase V
5 points
Question 4
1. All of the following requirements became mandatory when Congress passed the Sarbanes-Oxley Act of 2002, except:
Companies are required to establish an independent audit committee.
Prohibition on consulting work that auditors can perform for their audit clients.
Mandatory rotation every five years of the partner in charge of the audit engagement.
Creation of the Committee of Sponsoring Organizations (COSO) to oversee companies who do business on the New York Stock exchange (NYSE).
5 points
Question 5
1. The following individual is responsible for overseeing the day-to-day activities on a specific audit:
Partner
Senior
Manager
Supervisor
5 points
Question 6
1. The second principle of performance developed by the AICPA requires the auditor to do all of the following during an audit except:
Obtain absolute assurance as to whether the financial statements are free from material misstatements.
Determine materiality levels.
Identify risks of material misstatement.
Implement appropriate audit responses to assessed risks.
5 points
Question 7
1. The board of directors' primary objective for the shareholders is to:
Compile financial statements for submission to the Securities and Exchange Commission (SEC)
Supervise the activities of the internal auditors.
Build long-term sustainable growth in shareholder value.
Evaluate potential external auditing companies to select for the annual audit.
5 points
Question 8
1. One of the most significant provisions of the Sarbanes/Oxley Act of 2002 was:
The mandatory requirement to compile financial statements in accordance with the standards provided by the Public Companies Accounting Oversight Board (PCAOB).
Establishment of the American Institute of Certified Public Accountants (AICPA) and their Code of Conduct.
Specifies the education and experience requirements for all members on the board of directors.
Requires the CEO and CFO to certify their company's financial statements.
5 points
Question 9
1. Which of the follow ...
eco 372 week 2 knowledge check new,eco 372 week 2 team weekly reflection economic forecasting paper new,eco 372 week 2 individual assignment product purchases and the economy new,eco 372 week 2 assignment the real economy in the long run new,eco 372 week 2 principles of economics and the data of macroeconomics new,uop eco 372,eco 372,uop eco 372 week 2 tutorial,eco 372 week 2 assignment,uop eco 372 week 2 help
bis 155,bis 155 entire course,bis 155 devry,devry bis 155,bis 155 ilabs,bis 155 exercise, bis 155 final exam,devry bis 155 course project,bis155 week 2 ilab,bis 155 week 2 quiz,bis 155 week 2 ilab data analysis with spreadsheets with lab
bis 155 week 1 to week 5 all quiz,bis 155,bis 155 entire course,bis 155 devry,devry bis 155,bis 155 ilabs,bis 155 exercise, bis 155 final exam,devry bis 155 final exam,bis 155 course project,bis 155 free,bis 155 week 1,bis 155 week 2,bis 155 week 3,bis 155 new
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
This is a presentation by Dada Robert in a Your Skill Boost masterclass organised by the Excellence Foundation for South Sudan (EFSS) on Saturday, the 25th and Sunday, the 26th of May 2024.
He discussed the concept of quality improvement, emphasizing its applicability to various aspects of life, including personal, project, and program improvements. He defined quality as doing the right thing at the right time in the right way to achieve the best possible results and discussed the concept of the "gap" between what we know and what we do, and how this gap represents the areas we need to improve. He explained the scientific approach to quality improvement, which involves systematic performance analysis, testing and learning, and implementing change ideas. He also highlighted the importance of client focus and a team approach to quality improvement.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdfTechSoup
In this webinar you will learn how your organization can access TechSoup's wide variety of product discount and donation programs. From hardware to software, we'll give you a tour of the tools available to help your nonprofit with productivity, collaboration, financial management, donor tracking, security, and more.
Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdf
Devry acct-555-midterm
1. DEVRY ACCT 555 Midterm
Check this A+ tutorial guideline at
http://www.acct555entirecourse.com/acct-
555/acct-555-midterm-new
For more classes visit
http://www.acct555entirecourse.com
www.acct555entirecourse.com
(TCO F) Which of the following procedures
should an auditor generally perform regarding
subsequent events?
(TCO A) An auditor reads the letter of
transmittal accompanying a county's
comprehensive annual financial report and
identifies a material inconsistency with the
financial statements. The auditor determines
that the financial statements
2. do not require revision. Which of the following
actions should the auditor take?
(TCO F) An auditor's independence is
considered impaired if the auditor has:
(TCO B) When an independent CPA is associated
with the financial statements of a publicly held
entity but has not audited or reviewed such
statements, the appropriate form of report to be
issued must include a(an):
(TCO F) Which is not a characteristic of
the reliability of evidence?
(TCO C) According to PCAOB standards, the
nature and extent of required planning activities
for an issuer audit are influenced by all of the
following
factors, except for:
3. (TCO F) Analytical procedures must be
used during which phase(s) of the audit?
Test of controls OR planning OR completion
(TCO F) In a financial statement audit, inherent
risk is evaluated to help an auditor assess which of
the following?
(TCO F) The primary purpose of performing
analytical procedures in the planning phase of an
audit is to
(TCO G) The most widely used profitability ratio is
(TCO G) Which ratio is best used to assess a
company's ability to meet its long-term debt
obligations?
(TCO A) Match the following definitions to
the
appropriate terms
4. (TCO B) The following is a portion of a qualified
audit report issued for a private company.
To the shareholders of Tamarak Corporation,
We have audited the accompanying balance sheet
of Tamarak Corporation as of October 31, 2009,
and the related statements of income, retained
earnings, and cash flows for the past year. These
financial statements are the responsibility of the
company's management. Our responsibility is to
express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with
auditing standards generally accepted in the
United States of America. Those standards
require that we plan and perform the audit to
obtain reasonable assurance about whether the
financial statements are free of material
misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit
also includes assessing the accounting principles
used and significant estimates made by
management, as well as evaluating the overall
financial statement
5. presentation. We believe that our audit provides a
reasonable basis for our opinion.
The company has included in property and debt in
the accompanying balance sheet certain lease
obligations that, in our opinion, should be
expensed in order to conform with generally
accepted accounting principles. If these lease
obligations were capitalized, property would be
decreased by $4,000,000, long-term debt by
$2,000,000, and retained earnings by $180,000 as
of October 31, 2009, and net income and earnings
per share would be decreased by $180,000 and
$0.62, respectively, for the past year.
Required: Complete the above qualified audit
report by preparing the opinion paragraph. Do not
date or sign the report.
(TCO C) The following situation involves a possible
violation of the AICPA's code of professional
conduct. For this situation, (1) determine the
applicable rule number from the code, (2) decide
whether or not the code has been violated, and (3)
briefly explain how the situation violates (or does
not violate) the code. Your answer should be set
up
something like this:
6. Rule #_Violation? Yes or No.
Provide a one- or two-line explanation.
Auditor Tex Gato of the CPA firm
Smackey and Smackey, CPAs, enjoyed
auditing his favorite client, Super Pup
Dog Food, because the client would
allow him to take home to his dog a
variety of dog food samples that
amounted to a year's
worth of dog food.
(TCO C) The following situation involves a possible
violation of the AICPA's code of professional
conduct. For this situation, (1) determine the
applicable rule number from the code, (2) decide
whether or not the code has been violated, and (3)
briefly explain how the situation violates (or does
not violate) the code. Your answer should be set
up
something like this:
Rule #_Violation? Yes or No.
Provide a one- or two-line explanation.
Howard Cunningham & Co., CPAs, designates its
firm as Members of the American Institute of
Certified Public Accountants. All of the partners of
the firm are CPAs. However, one of the partners
7. has recently chosen to allow her membership to
lapse because of personal reasons.
(TCO C) Under the provisions of the Sarbanes-
Oxley Act of 2002 (SOX), the audit committee of a
public company has specific guidelines to which
employees must adhere. Discuss some of the
mandated features of the audit committee of a
public company under SOX
(TCO D) Discuss some of the steps the AICPA and
the accounting profession as a whole can and are
taking to reduce practitioners' exposure to
lawsuits. You answer should provide at least five
steps
(TCO F) Match nine of the terms (A-K) with the
definitions provided below (1-9).
A - Foot B - Compute C - Scan D - Inquire E-
Count
8. F - Trace G - Recompute H - Read I - Examine J -
Observe K - Compare
_1: A calculation done by the auditor
independent of the client
_2: Addition of a column of numbers to
determine if the total is the same as the client's
_3: A comparison of information in two
different locations
_4: A use of the senses to assess certain
activities
_5: Following details of transactions from
original documents to journals
_6: A less detailed examination of a document
or record to determine if there is something
unusual warranting further investigation
_7: Obtaining information from the client in
response to specific questions
_8: A determination of assets on hand at a
given time
_9: An examination of written information to
determine facts pertinent to the audit
9. (TCO G) Discuss the essential activities involved
in the initial planning of an audit.
www.acct555entirecourse.com
10. (TCO G) Discuss the essential activities involved
in the initial planning of an audit.
www.acct555entirecourse.com
