Class Notes (922,233)
CA (542,774)
UTSC (32,897)
MGA (249)
MGAD20H3 (5)
Lecture

Lec 10 - Fraud Auditing

5 Pages
111 Views

Department
Financial Accounting
Course Code
MGAD20H3
Professor
Julie Mc Donald

This preview shows pages 1-2. Sign up to view the full 5 pages of the document.
MGTD61 Wk 10 March 21, 2011
Chapter 16 EP 6-14
EP 14
f. Associated 1 mark
Explanation 1 mark
The PA associates himself with information issued by the enterprise when
performing services in connection with that information; the PA has decided
to prepare Hunters tax return using financial information supplied by the
company
EP 6
-Read the required, separated into 5 parts
-Dont just look for review, talk about audit as well
-Dissect required
EP 7
AdvantagesDisadvantages
Higher assurance since:
1.Cash is risky
2.Small business more difficult to
segregate
1.More time to complete
2.Cost more for client
3.Users may percecive a change from
review to audit -> inappropriate
reliance -> future potential lawsuits
Conclusion:
Remove policy
Part B
-Partners want to be safe by increasing assurance to save money
EP 8
-proper format
-assertion
-no review/audit procedure
-statement caution reader not appropriate for their purpose
-no opinion expressed on statements
-b/c not independent, related to owner: statement of being not independent
www.notesolution.com
Part B
-GAAP => amortization, notes
-Can still have a GAAP statement and be compilation
-Level of assurance GAAP statement = zero
-Ask the bank if need any level of assurance; if they do the blood relationship cannot
perform the review or the audit b/c of independence
-Cash basis vs. accrual basis of accounting (most small companies use cash basis b/c
tax rule, no deferred taxes) *use when need to follow GAAP
EP 9 3 marks each:
a.Get client permission for release of information
No violation of confidential information, therefore no response about fees
b.Client permission
Allowed = show successor evidence of what happened previous year
Not allowed = cannot mention
c.Client permission
Allowed = mention inventory, pervasiveness
Not Allowed = no opinion can be given
d.Denial of opinion
Not allowed = warn about engagement risk
e.For part a, At the acceptance level, may not have access to review financial
statements yet
Pervious auditor did not get paid
What can you ask for upfront = progress payments, upfront fees paid
Engagement letter stated at certain date for payment
Progress billing throughout engagement
For part b, prev auditor says walked away b/c unethical
Assume predecessor following same level ethics as you have, both abide by Rules of
Professional Conduct
If they wont touch, you dont touch
For part c, see where to focus more attention of audit
As long as client not following GAAP, will have qualification to report
EP 10
a.1 mark talk about time constraints, get close to interim date, auditor schedule
work appropriately; Timing
4 marks analytical procedures, lack of a lot of work
Contingencies to see if anything has changed
www.notesolution.com

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
Description
MGTD61 Wk 10 March 21, 2011 Chapter 16 EP 6-14 EP 14 f. Associated 1 mark Explanation 1 mark The PA associates himself with information issued by the enterprise when performing services in connection with that information; the PA has decided to prepare Hunters tax return using financial information supplied by the company EP 6 - Read the required, separated into 5 parts - Dont just look for review, talk about audit as well - Dissect required EP 7 Advantages Disadvantages Higher assurance since: 1. Cash is risky 1. More time to complete 2. Small business more difficult to 2. Cost more for client segregate 3. Users may percecive a change from review to audit -> inappropriate reliance -> future potential lawsuits Conclusion: Remove policy Part B - Partners want to be safe by increasing assurance to save money EP 8 - proper format - assertion - no reviewaudit procedure - statement caution reader not appropriate for their purpose - no opinion expressed on statements - bc not independent, related to owner: statement of being not independent www.notesolution.com
More Less
Unlock Document


Only pages 1-2 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit