Week 1 Self-Guided QuizRunning head WEEK 1 SELF-GUIDE.docx

Week 1 Self-Guided Quiz
Running head: WEEK 1 SELF-GUIDED QUIZ
1
WEEK 1 SELF-GUIDED QUIZ
2
Week 1 Self-Guided Quiz
Write a brief response, 30-90-words, for each question below.
1. In your own words, define “Auditing.”
Auditing is an independent person evaluating a company’s
information through a substantial amount of evidence to ensure
the information provided follows the established criteria. In
addition to ensuring compliance to the related criteria, a report
is provided in determining how well the company corresponds
to such criteria.
2. Discuss the importance of “Evidence” in auditing.
Evidence is important because it is what is used by auditors to
determine whether the information provided for review by the
auditors is stated in accordance with the established criteria.
3. Define “Independence” and “Objectivity” as they relate to
auditing.
According to The Institute of Internal Auditors (2011),
“Independence: The freedom from conditions that threaten the

ability of the internal audit activity to carry out internal audit
responsibilities in an unbiased manner. Objectivity: An
unbiased mental attitude that allows internal auditors to perform
engagements in such a manner that they believe in their work
product and that no quality compromises are made. Objectivity
requires that internal auditors do not subordinate their judgment
on audit matters to others.”
4. Audits typically consist of three phases: Planning;
Fieldwork; Reporting. Describe activities that accompany each
phase.
In the planning phase, the auditee is notified of the upcoming
audit and the objectives that will be evaluated. A basic
overview is provided to the auditee so that they may gather the
necessary information in preparing for the next phase,
fieldwork. Fieldwork consists of analyzing enough evidence, or
information, in order to determine whether the company is
performing its operations as it should, in accordance with the
information’s criteria. After the conducted fieldwork, the
auditor would then prepare a report, expressing their findings as
well as making recommendations on where they find areas that
can be improved.
5. Distinguish between Assurance and Attestation Services.
The objective for an assurance service is to improve the quality
of information. An attestation service, a type of assurance
service, is a CPA firm providing a report about a subject matter
or assertion made by a third party.
6. Describe the following types of Audits:
a. Operational Audits
Operational audits evaluate the efficiency and effectiveness of
any part of an organization’s operating procedures and methods
b. Compliance Audits
Compliance audits are conducted to determine whether the
company is following the procedures, rules, or regulations that
are set by the higher authority.
c. Financial Statement Audits
Financial Statement Audits is the determination that the

financial statements, and the information being verified, are
stated correctly and in accordance with the specified criteria.
d. Informational Technology Audits (may need to go outside
the text to address this)
Informational Technology Audits is an audit of IT controls and
how well it protects corporate assets and ensures data integrity.
In addition to examining the physical security controls, it
examines the overall business and financial controls that are
involved in the information technology system
7. Discuss the following types of Auditors:
a. Auditors Working for CPA Firms
Auditors working for CPA firms are licensed CPAs and are
responsible for auditing the published historical financial
statements. They are often called ‘external auditors’ or
‘independent auditors.’
b. Governmental Auditors (e.g. GAO, IRS, health inspectors)
Governmental auditors work for the Government Accountability
Office Auditors and conducts audits for Congress, with the same
responsibilities as of CPA firms.
c. Internal Auditors
Internal auditors are employed by all types of organizations to
audit for management, therefore, the responsibility varies.
8. Identify the roles CPA firms play in society.
CPA Firms provide audit services to a wide array of businesses
and individuals. Not only do they offer audit services but they
offer bookkeeping services, tax services and management
consulting services as well. In addition to conducting audits,
CPA firms also provide bookkeeping and accounting services,
tax services, and advisory services.
9. Briefly explain Sarbanes-Oxley (SOX) and the role the
Securities and Exchange Commission (SEC) plays in regulating
audits.
Due to the bankruptcies and large corporations, such as Enron
and WorldCom who have committed fraud, Sarbanes-Oxley Act
(SOX) was passed to improve financial disclosures. The
Securities and Exchange Commission (SEC) oversees the

orderly conduct of securities market and helps provide investors
with reliable information.
10. What is the role of the AICPA? The PCAOB? The Institute
of Internal Auditors (IIA)?
The AICPA sets standards and rules that all CPAs must follow.
The PCAOB provides oversight for auditors, establishes
auditing and quality control standards, and performs inspections
of the quality controls, for public companies. According to The
Institute of Internal Auditors (2017), the mission of IIA is to
provide leadership of the global profession of internal auditing.
11. Summarize the 10 components of Generally Accepted
Auditing Standards (GAAS)
The 10 components of Generally Accepted Auditing Standards
are found in three categories. The first category, General
Standards, requires: 1) the audit to be performed by a
technically trained and proficient auditor, 2) and auditor to have
independent mental attitude in all subject matters, and 3) be
professional while conducting the audit and preparing the
report. The next category, Standards of Field Work, requires: 1)
work to be adequately planned and supervised, 2) enough
understanding of internal controls, and 3) obtain sufficient
appropriate evidence. Finally, the third category, Reporting
Standards, involves: 1) indicating financial statements presented
in accordance with GAAP, 2) identify circumstances not
reported in the current period, 3) include informative
disclosures, and 4) contain an expression or opinion regarding
the financial statement.
12. What are SAS, and for what are they used?
Statements on Auditing Standards (SAS) are authoritative
literature, providing guidance for those completing the audit
13. True or False – CPA firms are required to engage in
quality control efforts of its audits? Why or Why not?
True, CPA firms are required to engage in quality control
efforts when conducting audits. Quality control systems provide
assurance that auditing standards are being followed as it is not
guaranteed that will be done so.

14. What is a Peer Review and how and when are they
performed?
Peer reviews are reviews by CPAs of a CPA firm’s compliance
with its quality control system. A firm that is a member of the
AICPA are subject for peer reviews every three years.
15. Why does government often have different auditing and
accounting standards?
I believe the government has different auditing and accounting
standards due to the different nature of the overall business, as
well as, the internal and external users involved. For example,
the government earns revenue from taxpayers, therefore,
accounting and auditing must be properly stated and conducted
in a diligent manner to represent information in a well-
mannered form.
References
Arens, A. A., Elder, R. J., & Beasley, M. S. (2013). Auditing &
Assurance Services: An Integrated Approach (15th ed.). :
Pearson. Retrieved from
https://phoenix.vitalsource.com/#/books/9781323008591
The Institute of Internal Auditors. (2011). Independence and
Objectivity. Retrieved from
https://www.iia.org.uk/media/57156/independence_and_objectiv
ity.pdf
TechTarget. (2017). IT Audit (Information Technology Audit).
Retrieved from
http://searchcompliance.techtarget.com/definition/IT-audit-
information-technology-audit
The Institute of Internal Auditors. (2017). About the IIA.
Retrieved from https://na.theiia.org/about-us/Pages/About-The-
Institute-of-Internal-Auditors.aspx
THE SIGNIFICANCE OF TUBERCULOSIS IN THE UNITED
STATES 1
THE SIGNIFICANCE OF TUBERCULOSIS IN THE UNITED
STATES 7

COH 315: Introduction to Epidemiology
National University
The significance of Tuberculosis in the United States
Tuberculosis (TB) is a common infectious bacterial disease that
affects the lungs and in rare cases, other parts of the body such
as kidney and bones. TB poses a considerable threat to public
health despite popular misconceptions that it is a disease of the
past. The disease affects almost one-third of world population
and are responsible for 1.5 million deaths every year mostly in
developing countries. TB is much less common in the United
States of American and according to statistics, only about
10,500 people were diagnosed with the disease in 2011.
However, TB causes disproportional infections among people
with weak immune systems and foreign-born populace (Glaziou
et al., 2013).
TB burden
According to 2011 statistics, African and South East Asia
regions carry the heaviest TB burden. African region leads the
rest of the world in the number of TB deaths, prevalence, and
incidence. The Americas region has one of the least world’s TB
burden compared to the rest of the region. The number of TB

deaths, excluding HIV in Americas region stands at two per
100,000, while that of Africa and South-East Asia is 26 per
100,000. The TB and HIV prevalence rate (per 100,000
population is 293 in Africa, 271 for South-East Asia, 170 for
Eastern Mediterranean, 56 for Europe, and 35 for the Americas.
The number of HIV-positive incident TB cases rate per 100,000
people is 102 for Africa, 8 for South-East Asia, 4 for the
Americas, 3 for Europe, and one in the Eastern Mediterranean
(Glaziou et al., 2013).
Distribution and prevalence
According to Van Sighem et al. (2015), the United States has
maintained data on newly diagnosed cases of TB infection since
1953. TB statistics show that the rate of infections dropped on
annual rate of 2.3 percent between 1953 and 1985. During that
period, the number of new TB cases declined by 74 percent
from 84,304 cases to 22,201 cases. The TB infection rate
changed its decline trend and started increasing between 1985
and 1992 because of HIV/AIDS co-infection. During the 1985-
92 period, the number of TB infection rose by 20 percent to
reach 26,673. Statistics show that the increased TB infection
rate during 1985-1992 period contributes to over 64,000 extra
TB cases in the U.S. alone. The federal government initiated
strategies intended at reversing the rising rate of TB infections
that included committing extra resources in order to support TB
prevention programs. The government efforts included support
programs targeting HIV-infected people, giving the high-risk
populations preventive therapy, and wider screening. Statistics
show the number of TB cases dropped significantly during the
period 1992-2011. The rate of TB infection rate decreased from
10.5 to 3.4 per 100,000 persons, representing a 76 percent
decrease.
Demographics (Ethnic) factors
Although tuberculosis affect people of all races, statistics show
that TB affects certain subgroups in a disproportionate way.
Different demographic factors such as age, sex, ethnicity, race,
and country of origin show disparity in TB prevalence. Age is a

major factor in TB prevalence since statistics show TB cases
increases as the age increases. The 2011 U.S TB case rate shows
that the TB infection rate is lowest among children aged zero -
14 years whose prevalence rate stands at 0.9 per 100,000.
People above 65 years have the highest TB infection rate (5.4
per 100,000) compared with the other age groups, who recorded
lower rates. For instance, the infection rate among people aged
15- 24 years, 25-44 years, 45-64 years was 2.4, 4.1, and 4.0 per
100,000 respectively. Statistics show that men are 62 percent
more likely to get TB infections than women are, with a male
TB prevalence rate of 4.2 per 100,000. The TB incidence in men
and women decreased by 50 percent, but TB incidence decrease
among men was greater than that of women (Walter et al.,
2014).
According to Lim et al. (2013), race and ethnicity groups show
a significant disparity in the number of TB incidence. The 2011
statistics indicate that 83 percent of all TB cases in the United
States occur among racial and ethnic groups excluding non-
Hispanic whites. American Indian/Native Alaska and the Native
Hawaiian or Pacific Islanders accounted for less than one
percent of the TB cases. The whites accounted for 16.0 percent,
Blacks 23.0 percent, Hispanic, 29.0 percent, and the Asian 30.0
percent. Between 2004-2010 period, Hispanic had the highest
TB cases. TB incidence has gone down since 1993 having
declined by 50 percent in all racial/ethnic groups with the
exception of Asians.
Figure 1: TB infection rates by race/ethnicity groups
1993 1995 1997 1999 2001 2003 2005 2007 2009
2011
Rate
Comparing the TB cases among racial/ethnic groups, Asians TB
cases is 26 times that of non-Hispanic whites, 8 times that of
Blacks, 20 times that of Hispanic Native Hawaiians, and 7 times
that of Hispanics.

Foreign- born persons
The 2011 data indicate that foreign-born persons accounted for
62 percent of all TB cases. The health report indicates that for
the last eleven years foreign-born persons have been
contributing the biggest percent of TB burden. This represents
a different scenario compared to 1993 statistic that show
foreign-born persons contributing less than 30 percent of annual
TB cases. Although the overall TB cases have declined since
1993, the rate has been less substantial among foreign-born
persons. The 2011 data show that foreign-born persons were
11.5 times more likely to get infected that the U.S-born persons.
The 2011 TB prevalence rate among the U.S-born and foreign-
born persons stood at 1.5 and 17.2 per 100,000 respectively.
Among the foreign-born persons, the Asians and Hispanic
accounts fro 80 percent of the foreign-born TB cases. The
numbers of cases among the foreign-born persons according to
countries of origin include Mexico (1,432), India (502), China
(376), Philippines (757), Haiti (187), Vietnam (546), and
Guatemala (166). TB rates among immigrant communities are
high because the countries of origin lack adequate screening and
tuberculosis prevention therapy (Walter et al., 2014).
TB prevalence rates by state
The 2011 data show a continued decline in TB case rates in 29
states and an increase in 16 states including the District of
Columbia. The rates of TB cases in 38 states were below the
United States’ national average of 3.4 per 100,000. However,
the rate of TB cases in twelve states and the District of
Columbia was above 3.4 per 100,000. The states of California,
New York, Texas, and Florida each reported 500 TB cases or
more according to 2011 data. The data also indicate that over 50
percent of TB cases were in the foreign-born persons in 32
states. In addition, foreign-born population accounted for 70
percent of reported cases of TB in seventeen states. Foreign-
born population account for 100% of TB cases reported in North
Dakota, 85% and 84% in Minnesota and Massachusetts
respectively. The highest percent of TB case rates among the

U.S-born persons occurred in the states of Mississippi and
Montana at 80% and 88% respectively(Lim et al., 2013).
Risk factors
According to Van Sighem et al. (2015), an HIV/AIDS infection
is a major risk factor for the development of Tuberculosis. The
human immunodeficiency virus diminishes the body’s ability to
resist infection, thus increasing the likelihood of getting TB
infection. HIV weakens a person’s immune system and thus
increases chances of developing TB. World Health organization
data indicate that TB account for 23 percent of HIV/AIDS
deaths worldwide. For those individuals infected with TB, the
rate of developing active TB among the HIV-positive patient is
30 times that of the HIV-negative people. Data shows that 1.1
million HIV-positive people globally developed TB in 2011,
this represent 13 percent of all TB cases. HIV has been
identified an important determinant of the rising incidence of
TB among poor populations. The 2011 data indicate that 6
percent of all TB cases in the United States were HIV-related;
the rate was even higher (10.0 %) among 25-44 year olds
(Suthar et al., 2012).
Behavioral risk factors
Studies show people who smoke tobacco and those who
consume alcohol are at a higher risk of developing active TB on
exposure than non-tobacco smoker and non-alcohol consumers.
Studies associate cigarette smoking to increased rate of TB
infection. According the studies, cigarette smokers have a
higher risk of TB infection and developing active TB than
nonsmokers do. Marginalized populations, such as homeless and
prisoners exposed to injection drug abuse have a higher chance
of getting TB infection (Basu et al., 2011).
Occupational risk factors
According to Lim et al. (2013), scientific studies show that
proximity to infectious TB case increases the risk of becoming
infected with TB Mycobacterium and developing active TB.
Studies show that people in close contact with TB cases such as
health care workers, caregiver, and household contact are at

higher risk of TB infection.
Slow socioeconomic status
Studies have shown that rapid urbanization and social economic
status (SES) influence an individual’s susceptibility to TB
infection. Studies show that people with low SES have a higher
risk of TB infection because they are exposed to other TB risk
factors such as alcoholism, indoor air pollution, and
malnutrition. A person with low SES are also exposed to poor
ventilation, crowded housing area, and unsafe cooking facilities
(Glaziou et al., 2013).
Malnutrition
Malnutrition both at macro- and micro-deficiency is an
important risk factor because it impairs human immune
response, thus increasing the risk of developing active TB.
According to studies, malnourished children have twice the
chances of developing TB disease than well-nourished children.
In addition, malnourished adults have six to ten times chances
of developing active TB than well-nourished adults (Cegielski,
Arab & Cornoni, 2012).
Diabetes
Studies have shown that diabetes also increases the risk of
developing active TB. Studies also show diabetes patients have
three times chances of developing TB than people without
diabetes. Diabetes also increases the risk of TB death by 1.89
times and five times if a patient suffers from diabetes mellitus.
Conclusion
Since 1979, TB death rates have been on a downward trend
except 1985-1992 periods during the advent of HIV/AIDS. The
number of reported TB cases in the United States has
continuously reduced since 1993 and by 2011, the rate of TB
infection stood at 3.4 per 100,000 persons. The TB burden in
America is not as bad as in the other regions in the world;
however, TB is serious health problem the federal government
has made an effort to address. Many factors contribute to
increased TB incident in U.S, they include HIV/AIDS,
behavioral factors (alcoholism and tobacco use), immigrants’

issues, social economic status, and occupational factors.
Eliminating TB infection in the United States will require a
concerted effort in prevention, diagnosis, treatment, and
complete reporting.
References
Basu, S., Stuckler, D., Bitton, A., & Glantz, S. A. (2011).
Projected effects of tobacco smoking on worldwide tuberculosis
control: mathematical modelling analysis. Bmj, 343, d5506.
Cegielski, J. P., Arab, L., & Cornoni-Huntley, J. (2012).
Nutritional risk factors for tuberculosis among adults in the
United States, 1971–1992. American journal of epidemiology,
kws007.
Glaziou, P., Falzon, D., Floyd, K., & Raviglione, M. (2013).
Global epidemiology of tuberculosis. Semin Respir Crit Care
Med, 34(1), 3-16.
Lim, S. S., Vos, T., Flaxman, A. D., Danaei, G., Shibuya, K.,
Adair-Rohani, H., ... & Aryee, M. (2013). A comparative risk
assessment of burden of disease and injury attributable to 67
risk factors and risk factor clusters in 21 regions, 1990–2010: a
systematic analysis for the Global Burden of Disease Study
2010. The lancet, 380(9859), 2224-2260.
Suthar, A. B., Lawn, S. D., Del Amo, J., Getahun, H., Dye, C.,
Sculier, D., ... & Granich, R. M. (2012). Antiretroviral therapy
for prevention of tuberculosis in adults with HIV: a systematic
review and meta-analysis. PLoS Med, 9(7), e1001270.
van Sighem, A., Nakagawa, F., De Angelis, D., Quinten, C.,
Bezemer, D., de Coul, E. O., ... & Phillips, A. (2015).
Estimating HIV incidence, time to diagnosis, and the
undiagnosed HIV epidemic using routine surveillance data.
Epidemiology (Cambridge, Mass.), 26(5), 653.

Walter, N. D., Painter, J., Parker, M., Lowenthal, P., Flood, J.,
Fu, Y., ... & Reves, R. (2014). Persistent latent tuberculosis
reactivation risk in United States immigrants. American journal
of respiratory and critical care medicine, 189(1), 88-95.
White 1993.0 3.6 3.1 2.5 2.3 2.1 1.8 1.6 1.5
1.3 0.8 Black 1993.0 23.8 23.0 20.0 16.0 14.0
12.0 11.0 9.0 8.0 5.6 Hispanic 1993.0 19.8 17.0
14.0 11.5 10.5 9.700000000000001 8.9 7.3 6.7 5.3
Asian 1993.0 41.3 42.3 36.0 33.0 32.0 30.0 26.0
27.2 23.0 20.1 Native Hawaiian/Other Pacific Islanders
1993.0 16.1 13.8 22.3 16.3 15.8 American Natives or
Alaska Natives 1993.0 14.1 15.3 11.5 10.5 10.2 10.0 9.8
8.5 6.3 5.5
COH 315: Epidemiology
Paper Rubric
Students are expected to submit a 5 paged research papers of
choice. The paper will focus on either a chronic non-
communicable disease or a communicable disease that is of
great significance in the United States. The paper will focus on
the burden of disease/distribution, prevalence and risk factors.
Each paper should reflect the application of knowledge and
skill, and source credibility. The content encompasses the
expression of authenticity with validity and reliability.
Scholarly sources are expected to be used and appropriately
cited.
PLO: #1. Explain the core principles of public health and their
relationship to the health status of groups, communities, and
populations at the local, state, national, and international levels.
Outstanding Achievement
Commendable Achievement

Marginal Achievement
Unsatisfactory Achievement
Failing
Significance
20%
Student has chosen a disease of great significance in the United
States and has presented evidence of high prevalence, high
incidence, many years of potential life lost or an epidemic
15%
Student has chosen a disease of great significance however has
not supported that claim with evidence
10%
Students has chosen a disease that is somewhat significant in
the United States
5%
Student has chosen a disease of minor significance to the United
States
0%
Student has not focused the presentation on a disease
Burden of Disease/ Distribution and Prevalence
20%
Clear explanation of the prevalence, incidence and distribution
of the disease by gender, age, ethnicity, income and other
important variables
15%
Explanation of prevalence and incidence without distribution of
disease
10%

Identifies only one measure of disease burden
5%
Lack of clear explanation of the data being presented
0%
Missing
Identifies Risk Factors
25%
Includes behavioral, occupational and environmental risk
factors. Correctly identifies risk factors. Relies on multiple
credible sources.
18.75%
Correctly identifies multiple risk factors from one reliable
source.
12.5%
Identifies limited risk factors
6.25%
Incorrectly identifies risk factors
0%
Missing
Use of primary and secondary data
10%
Correctly identifies and uses primary and secondary data for
assessment of the disease.
7.5%
Correctly identifies data however uses secondary data only for

the assessment
5%
Limited identification and use of primary and/or secondary data
2.5%
Incorrectly identifies primary and secondary data
0%
Missing
Writing Style
20%
All sentences are well-constructed with varied structure.
All sentences sound natural and are easy-on-the-ear when read
aloud. Each sentence is clear and has an obvious emphasis.
Writer makes no errors in grammar or spelling that distract the
reader from the content.
Writer makes no errors in capitalization or punctuation, so the
paper is exceptionally easy to read.
Writer uses vivid words and phrases that linger or draw pictures
in the reader's mind, and the choice and placement of the words
seems accurate, natural and not forced.
15%
Most sentences are well-constructed with varied structure.

Almost all sentences sound natural and are easy-on-the-ear
when read aloud, but 1 or 2 are stiff and awkward or difficult to
understand.
Writer makes few errors in grammar or spelling that distract the
reader from the content.
Writer makes 1 or 2 errors in capitalization or punctuation, but
the paper is still easy to read.
Writer uses vivid words and phrases that linger or draw pictures
in the reader's mind, but occasionally the words are used
inaccurately or seem overdone.
10%
Most sentences are well-constructed but have a similar
structure.
Most sentences sound natural and are easy-on-the-ear when read
aloud, but several are stiff and awkward or are difficult to
understand.
Writer makes some errors in grammar or spelling that distract
the reader from the content.
Writer makes a few errors in capitalization and/or punctuation
that catch the reader's attention and interrupt the flow.
Writer uses words that communicate clearly, but the writing
lacks variety, punch or flair.
5%

Sentences lack structure and appear incomplete or rambling.
The sentences are difficult to read aloud because they sound
awkward, are distractingly repetitive, or are difficult to
understand.
Writer makes many errors in grammar or spelling that distract
the reader from the content.
Writer makes several errors in capitalization and/or punctuation
that catch the reader's attention and greatly interrupt the flow.
Writer uses a limited vocabulary that does not communicate
strongly or capture the reader's interest. Jargon or cliches may
be present and detract from the meaning.
0%
Referencing
5%
Citations and references are in proper APA format. Ample
sources are cited. All claims are supported with a professional
reference.
4%
sources are cited. Some claims leave the reader looking for a
reference.
3%
sources are cited. Many claims leave the reader looking for a
reference.

2%
Citations and references are limited, missing or incorrect.
0%
Citations and references are missing or incorrect.
Week 1 Textbook Problems
ACC/491
Running head: WEEK 1 TEXTBOOK PROBLEMS
1
WEEK 1 TEXTBOOK PROBLEMS
7
Week 1 Textbook Problems
1-20 (Objective 1-7) Five college seniors with majors in
accounting are discussing alternative career plans. The first
senior plans to become an internal revenue agent because his
primary interest is income taxes. He believes the background in
tax auditing will provide him with better exposure to income
taxes than will any other available career choice. The second
senior has decided to go to work for a CPA firm for at least 5
years, possibly as a permanent career. She believes the variety

of experience in auditing and related fields offers a better
alternative than any other available choice. The third senior has
decided on a career in internal auditing with a large industrial
company because of the many different aspects of the
organization with which internal auditors become involved. The
fourth senior plans to become an auditor for the GAO because
she believes that this career will provide excellent experience in
computer risk assessment techniques. The fifth senior would
like to ultimately become a certified fraud examiner but is not
sure where the best place is to begin his career so that he can
achieve this long-term goal.
a. What are the major advantages and disadvantages of each of
the four types of auditing careers?
Certified Public Accounting Firms – Major advantages of CPA
Firms are ample
experience in various types of auditing scenarios and the growth
opportunities within the
CPA firm. Disadvantages include extensive education
requirements and limited
experience with operational auditing.
Government Accountability Office Auditors – Advantages
include extensive work in
operational auditing. Disadvantages include limitations to
variety of work due to
extensive work for the Federal Government.
Internal Revenue Agents – Advantages are extensive experience
in tax auditing, while
disadvantages are learning tax laws and limitations to the
variety of audits performed.
Internal Auditors – Advantages to Internal Auditors are the
ability to work in various
parts of business and focus in one business industry.
Disadvantages include limited
industry exposure and very little tax auditing exposure.

Firms are ample
Firms are ample

IRS Agent - Advantages: In-depth training in individual,
corporate, gift, and other taxes. Disadvantages: Limited
experiences related to taxes and no experience of financial
statements.
CPA – Advantages: In-depth training in financial statement and
operational auditing.. Disadvantages: Limited experience
related to business as compared to an internal auditor.
GAO – Advantages: Opportunity to work in the area of
operational auditing. Disadvantages: Limited experience related
to different business including financials and taxes.
Internal Auditor – Advantages: Opportunity to work in all areas
of the business. Disadvantages: Limited experience in taxation.
b. What do you think is the best early career choice for the
senior interested in ultimately becoming a certified fraud
examiner?
·
examiner, I would
· suggest to become an internal auditor. As an internal auditor,
the senior would
one type of industry.
· From there, the senior could pursue a career in fraud
examining, knowing the
· industry of which they want to examine
The best early career choice for the senior interested in

ultimately becoming a certified fraud examiner is to start
working as an internal auditor.
c. What other types of auditing careers are available to those
who are qualified?
Other types of auditing careers are available to those who are
qualified include forensic auditors, government auditors, and
external auditors.
1-21 (Objectives 1-6, 1-7) In the normal course of performing
their responsibilities, auditors often conduct audits or reviews
of the following:
1) IRS- Compliance Audit
2) GAO- Operational Audit
3) Internal Auditor & CPA- Operational Audit
4) CPA & Internal Auditor- Financial Statement Audit
5) GAO- Operational Audit
6) CPA- Financial Statement Audit
7) GAO- Financial Statement Audit
8) IRS- Compliance Audit
9) CPA- Financial Statement Audit
10) Internal Auditor & CPA- Compliance Audit
11) Internal Audit & CPA- Financial Statement
12) GAO- Compliance, Operational Audit
Required
· a. For these 12 examples, state the most likely type of auditor
(CPA, GAO, IRS, or internal) to perform each.
· b. In each example, state the type of audit (financial statement
audit, operational audit, or compliance audit).
2-18 (Objective 2-6) Sarah O’Hann enjoyed taking her first
auditing course as part of her undergraduate accounting
program. While at home during her semester break, she and her

father discussed the class and it was clear that he didn’t really
understand the nature of the audit process as he asked the
following questions:
a.
What is the main objective of the audit of an entity’s financial
statements?
The main objective of the audit of an entity’s financial
statements is to ensure accuracy in
the information presented and to ensure all information included
was supported by proper
documentation
The main objective of the audit of an entity’s financial
statements is to ensure accuracy in the information presented.
b.
The audit represents the CPA firm’s guarantee about the
accuracy of the financial statements, right?
The audit is not necessarily a guarantee, but rather an assurance
that the financial statements are properly conducted, and all
information is represented properly.
c.
Isn’t the auditor’s primary responsibility to detect all kinds of
fraud at the client?
An auditor’s primary responsibility to ensure materials being
audited are not falsified or objectified
d.
Given the CPA firm is auditing financial statements, why would
they need to understand anything about the client’s business?
Having a general understanding of the client’s business will
help make necessary judgement calls that are required of
auditor’s.
e.
What does the auditor do in an audit other than verify the
mathematical accuracy of the numbers in the financial
statements?
Other than verify the mathematical accuracy of the numbers in

the financial statements, auditors ensure proper notation is
applied when required and presentation of the financial
statements meet the standards set forth by the GAAP for the
information they are presenting.
Required
If you were Sarah, how would you respond to each question?
2-21 (Objective 2-6) Ray, the owner of a small company, asked
Holmes, a CPA, to conduct an audit of the company’s records.
Ray told Holmes that an audit was to be completed in time to
submit audited financial statements to a bank as part of a loan
application. Holmes immediately accepted the engagement and
agreed to provide an auditor’s report within 3 weeks. Ray
agreed to pay Holmes a fixed fee plus a bonus if the loan was
granted.
Holmes hired two accounting students to conduct the audit and
spent several hours telling them exactly what to do. Holmes told
the students not to spend time reviewing internal controls but
instead to concentrate on proving the mathematical accuracy of
the ledger accounts and summarizing the data in the accounting
records that support Ray’s financial statements. The students
followed Holmes’s instructions and after 2 weeks gave Holmes
the financial statements, which did not include footnotes.
Holmes reviewed the statements and prepared an unqualified
auditor’s report. The report did not refer to generally accepted
accounting principles or to the consistent application of such
principles.
Required
Briefly describe each of the principles underlying AICPA
auditing standards and indicate how the action(s) of Holmes
resulted in a failure to comply with each principle. Organize
your answer as follows:*
The first AICPA auditing principle is purpose of an audit, which
is to present an opinion
about the financial statements. Since Holmes failed to be hands
on with the auditing

process, his opinion of the audit was inaccurate and a guess at
best
The first AICPA auditing principle is purpose of an audit, which
is to present an opinion about the financial statements. Since
Holmes failed to be hands on with the auditing process, his
opinion of the audit was inaccurate and a guess at best.
The second AICPA auditing principle is responsibilities.
Auditors have the responsibility to be competent and capable of
performing the audit, comply with ethical standards, and
practice professional judgement. Holmes failed to comply with
the responsibility because he accepted a bonus for deliverance
of the loan which creates biased results and presents and ethical
issue.
The third AICPA auditing principle is performance.
Performance includes obtaining assurance, obtaining support
documentation, and overseeing assistants. Holmes failed to meet
the standards of performance because he told the students what
to do and then let them be.
The last AICPA auditing principle is reporting. Reporting
includes expressing an opinion of the financial statements and
to see that the statements were presented in accordance with
GAAP. Holmes presented an unqualified auditor’s report and
the report did not refer to GAAP.

References
Arens, A. A., Elder, R. J., & Beasley, M. S. (2014). Auditing
and assurance services: An integrated approach (15th ed.).
Boston: Pears

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