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How does the decline in stock price affect your assessment of client business risk and acceptable audit risk?
Explain the relationships among the initial assessed control risk, tests of controls and substantive tests of transactions for cash receipts.
Give one example in which the conclusions reached about internal controls in cash disbursements will affect the tests of cash balances.
Evaluate the effectiveness and state the shortcomings of the preparation of a bank reconciliation by the controller.
How do bank confirmations differ from positive confirmations of accounts receivable?
Describe what is meant by a cutoff bank statement and state its purpose.
Distinguish between lapping and kiting. Describe audit procedures that can be used to uncover each.
Briefly explain why accounting standards related to fair value estimates make the audit of financial instruments more complex.
Why is there a greater emphasis on the detection of fraud in tests of details of cash balances than for other balance sheet accounts?
Explain why, in verifying bank reconciliations, most auditors emphasize the possibility of a nonexistent deposit in transit being included in the reconciliation
A loan from the bank on June 26 was credited directly to the client's bank account. The loan was not entered as of June 30.
Compare the balance on the bank reconciliation obtained from the client with the bank confirmation.
What audit procedures would you use to verify each item in the bank reconciliation?
State how each bank transfer should be included in the December 31, 2013, bank reconciliation for the home office account after your adjustments in part.
Compare the details of the cash receipts journal entries with the details of the corresponding daily deposit slips.
Identify the inherent and control risks related to the financial instruments accounts for McNeil Co.
Describe the purpose of a financial statement disclosure checklist and explain how it helps the auditor determine if there is sufficient appropriate evidence.
Distinguish between a contingent liability and an actual liability and give three examples of each.
Distinguish between an asserted and an unasserted claim. Explain why a client's attorney may not reveal an unasserted claim.
How should Pyson determine the materiality of the lawsuits and the proper disclosure in the financial statements?
Distinguish between the two general types of subsequent events and explain how they differ.
Distinguish between a client letter of representation and a management letter and state the primary purpose of each.
What are the auditor's responsibilities related to the audit opinion and the opinion on internal controls?
Miles Lawson, CPA, believes that the final summarization is the easiest part of the audit if careful planning is followed throughout the audit.
Compare and contrast the accumulation of audit evidence and the evaluation of the adequacy of the disclosures in the financial statements.