Assessing the risk of fraud in a financial statement audit is a difficult audit judgment. Auditing standards require the auditor to perform several audit procedures to accumulate information to assess the risk of fraud. You are the in-charge auditor responsible for planning the financial statement audit of Spencer, Inc. Two new staff auditors are assisting you with the initial audit planning and have asked you the questions below. Please summarize your responses to these staff auditor questions:
a. What is the purpose of the audit team's brainstorming session?
b. Who should attend the brainstorming session and when should the session be held?
c. What is the role of the two staff auditors in the brainstorming session?
d. What is the auditor's responsibility under auditing standards for detecting fraud?
e. What must the auditor document in the working papers related to the brainstorming session?
Assessing the risk of fraud in a financial statement audit is a difficult audit judgment. Auditing standards require the auditor to perform several audit procedures to accumulate information to assess the risk of fraud. You are the in-charge auditor responsible for planning the financial statement audit of Spencer, Inc. Two new staff auditors are assisting you with the initial audit planning and have asked you the questions below. Please summarize your responses to these staff auditor questions:
a. What is the purpose of the audit team's brainstorming session?
b. Who should attend the brainstorming session and when should the session be held?
c. What is the role of the two staff auditors in the brainstorming session?
d. What is the auditor's responsibility under auditing standards for detecting fraud?
e. What must the auditor document in the working papers related to the brainstorming session?
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Related questions
14. What is the purpose of using analytical reviews during the planning stage of an audit?
MULTIPLE CHOICE
a. To test controls
b. to insure duties are segregated.
c. to identify unusual items for further investigation.
d. to insure the audit evidence supports the auditorâs conclusions regarding the financial statements.
33. Which of the following is not considered a limitation of internal control?
MULTIPLE CHOICE
a. Misunderstanding instructions.
b. Not having an internal audit function.
c. Mistakes of judgment.
d. Carelessness, distraction and/or fatigue.
35. Which of the following is correct concerning evidence provided by specialists on audits?
MULTIPLE CHOICE
a. The use of a specialist is most likely to be appropriate when the auditor's independence is questioned. | ||
b. The auditor must obtain an understanding of the methods used by the specialist to determine whether the findings are suitable to serve as corroborating evidence. | ||
c. The specialist must be independent in fact and appearance. | ||
d. A specialist should not be used to determine the market valuation of inventory. |
51. Auditors are primarily concerned with internal controls that relate to:
MULTIPLE CHOICE
a. Financial statement assertions made by management.
b. Compliance with laws and regulations.
c. Generally accepted auditing standards.
d. Balance sheet accounts.