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However, the answers should show for the Big 4: greater geographic coverage, largerPotter and Partners are a chartered accounting firm with offices inThe head of the business developmentRequired. What non-audit services could a chartered accounting firm provide to itsExplain why a company would buy these servicesAs discussed in detail in chapter 2 of the text, there are potential conflicts of interest ifFor example, an accounting firmThere is potential for the auditor to miss mistakes in the accounting reports throughHowever, provided the audit firm was not effectively auditing its own work in thePossible non-audit services that could be provided by a chartered accounting firm toClimate Balance Pty Ltd is a consulting firm specialising in sustainabilityIt offers sustainability report assuranceRequired. Why would a listed company obtain sustainability assurance servicesAs discussed in detail in chapter 2 of the text, there are potential conflicts of interest ifFor example, an accounting firmThere is potential for the auditor to miss mistakes in the accounting reports throughSustainability reporting (preparation of the report or assurance) would not create aHowever, companies could prefer to engage another consulting firm to prepare orSection 301 of the Corporations Act requires companies to have theirAcademic research suggests that Big-4 auditorsRequired. In times of economic recession would you expect:Why or why not?Financial report audits are mandatory for most companies, so overall demand isFirst, cost-Second, organisations with less credible financialThis suggestsWhy or why not? Shifting from a smaller auditor to a Big 4 auditor would increase both costs andTherefore, it can be argued that firmsProviders of corporate sustainability assurance reports often state thatRequired.
Explain why ISAE 3000 and ASRE 2405 would be useful in CSRISAE 3000 International Standard on Assurance Engagements (Revised) AssuranceIt deals with assurance engagements other than audits orIt applies to both reasonable assurance andBecause ISAE 3000 applies to assurance of information or reports other thanAppendix 4 contains examples of subject matters that are relevant to the type ofASRE 2405Review of Historical Financial Information Other than a Financial. Report is issued by the AUASB. It establishes mandatory requirements on anIt is relevant to reviews (that is, not audits) of financial information and thereforeASRE 2405 is specifically relevant to financial information, rather than social orIt would be relevant to financial metrics that are includedMaxSecurity is based in. Wollongong, where it manufactures high-tech armour-plated personnelIts main product, theClarke Field has been the engagement partner on the MaxSecurity auditClarke is a specialist in auditing clients in theThe board of MaxSecurity is considering issuing half-yearly financialMaxSecurity’s end of financial year is 30 June.Discuss the expectations gap that could exist for the audit of MaxSecurity. Consider the existence of any special interests of the users of. MaxSecurity’s financial reports. The expectations gap is the difference between the expectations of financial reportSpecial users for MaxSecurity could include:These suppliers would be interested in theSuch equipment could be made to specialised orderThe suppliers would have largeDiscussion. Consider how well MaxSecurity’s financial reports would provide the informationManagement is responsible for preparing the reports, butYou have recently graduated from your university course and start workNga is surprised that you areNga cannot understand why an audit is notNga also thinks that companyRequiredExplain why an auditorExplain why an auditor cannotThere is a gap between Nga’s expectations and the level of auditor performance.
AnThe audit enhances theIt requiresAnother reason the assurance is not absoluteAuditors cannot review every transaction andSome transactions and balances are difficult toProfessional scepticism is required of an auditor. It is an attitude that requires theThe auditor has a questioningThis does notUsually, there will be confirming evidenceManagers will not always try to deceiveThe auditor needs to be alert to the fact that some managersAnyone wishing to become a registered company auditor has to complyAct. The requirements were changed by the passage of the CLERP 9You have graduatedRequired. Visit the ASIC website and locate the guidance for meeting the regulatorySummarise thoseASIC, Regulatory Guide 180, Auditor Registration (September 2012), available at:For example, the competency standards that are approvedFurther (and most recent) information about these standards can be found on theYou are a trainee auditor working for a small audit firm. You completedYou overhear the two partners. Alex and Riley, discussing some problems they are facing with aASIC inspection program.Required. Write a report to Riley explaining (i) ASIC’s audit inspection programRefer to review question 1.20 for a discussion of review of audit quality ASIC and itsUseful articles describing the ASIC inspection program and the role of the CALDBNewman (2008) reports that ASIC has found evidence that the Big 4 auditors haveCALDB for disciplinary action, where appropriate.In 2002, the audit firm Arthur Andersen collapsed following chargesEnron. Some other clients announced that they would be dismissing. Arthur Andersen as their auditor even before it was clear that Arthur. Andersen would not survive. Required.
Using the theories outlined in this chapter on the demand for audit,The three theories discussed in the chapter are agency theory, the informationAgency theory suggests that there are incentives to hire an auditor to assess the truthThe auditor reports toThe good quality managers are willing to have the audit of their reports because itGood quality auditors are more highlyAndersen’s lowered their quality through their involvement with Enron, leading someIt has been suggested that companies taking earlyUltimately, all Andersen’s clients had to find anotherThe information hypothesis suggests that financial report users value higher qualityThe insurance hypothesis suggests that investors insure against their losses fromWhen Andersen’s credibility was damagedThis means thatChan and Partners Chartered Accountants is a successful mid-tierHoldings Group (MSHG), which owns 100 per cent of the followingShady Oaks Hospital, a private hospital group. Gardens Nursing Home Pty Ltd, a private nursing home. Total Cancer Specialists Limited (TCSL), a private oncology clinic thatYear end for all MSHG entities is 30 June. TCSL owns two relatively old linear accelerators used in radiationTCSL also wishes to purchase a new, more technologically advancedThe Department of Health has engaged the Auditor-General to check that. TCSL met the terms of the funding agreement. The Auditor-General has also been asked to conduct a performance auditHospitals generateGeneral waste isFive years ago, the federal government measured the amount of hospitalThe governmentThe aims of the Auditor-General’s performance audit include assessingThe Auditor-General’s preliminary findings indicate that many hospitalsDecember 2008. RequiredTCSL’s compliance with the terms of the funding agreement.We are not provided with this document.
The auditor will gather evidence about TCSL’s purchases of the linear acceleratorsIf the guidelines are specified with aAre two quotesThe performance audit examines economy, efficiency and effectiveness. The Auditor. General would consider criteria across all three dimensions. Some possibilitiesRon McLellan established his business, McLellan’s Shoes, in 1980. Since then heRon keeps records and his wife helps himAs McLellan’s Shoes has no outside owners. Ron has never seen the need to have his accounts audited. When Chip Masters from Cloud 9 Inc.McLellan’s Shoes in 1995, Ron was asked to provide audited financial reports. Ron discussed his concerns about having an audit with his friend Ernie Black. Ernie is concerned that Ron may forget their conversations and has asked you toAll audits provide some level of assurance to a user about the evaluation orFinancial report audits andEfficiency, or performance, audits are usually conductedFinancial reports provide a reasonable level of assurance and the audit report containsEnvironmental audits are usually limited assurance engagements, and the auditorThere are no binding auditing standardsAA1000AS for environmental audits, and all members of the accounting professionalReasonable assurance is the highest level of assurance. It means that the auditor hasThe auditorThe auditor performs a more limited set ofThe auditor provides an opinion stated inReasonable assurance is provided in an audit,Chip would ask that Ron have the financial report for McLellan’s shoes audited ratherChip would feel more confident about theRon would be purchasing a service from an audit firm. Therefore, Ron would considerThe audit firm would evaluate theMany clientsRon might also consider whether he is likelyAuditor’s professional ethics prevent them from beingResearch question.
Chong and Pflugrath conducted a study of different audit report formats andThey investigated whether reportThey surveyed a sample of shareholders andRequiredThe question asks for the student’s view. The student should propose a standard auditThe factors to be considered include:If the studentThe students should provideThe arguments supporting auditors’ current practices and the users’ alternativeAre there any arguments to supportIf auditors proactivelyAuditing A Practical Approach 3rd Edition Moroney Solutions Manual. This sample only, Download all chapters at: AlibabaDownload.comNow customize the name of a clipboard to store your clips. Auditing: a practical approach 2nd edition by Solutions Manual to accompany. Auditing: a practical approach 2nd edition by Jane Hamilton. Students also viewed Ch02 sm moroney 2e - Solutions Manual to accompany. Auditing: a practical approach 2nd edition by Ch04 sm moroney 2e - Solutions Manual to accompany. Auditing: a practical approach 2nd edition by Ch05 sm moroney 2e - Solutions Manual to accompany. Auditing: a practical approach 2nd edition by Ch07 sm moroney 2e - Solutions Manual to accompany. Auditing: a practical approach 2nd edition by Ch09 sm moroney 2e - Solutions Manual to accompany. Auditing: a practical approach 2nd edition by answer to the assignment Other related documents Week5 review quetions v1 Executive Summary 22018 9 Pub Sub 2403 Abdo PHAR2102-Renal-L1 - Lecture notes 1 HW Assignment 10 3310 Sample Essay Subjunctive Preview text Chapter 1: Introduction and overview of auditing. Solutions ManualAuditing: a practicalJane HamiltonWho are theAssurance Engagements, para. 8; International Framework for Assurance. Engagements, para. 7).
An audit provides reasonable assurance about the true and fair nature of the financialThe audit contains a positiveAn auditor may also perform agreed upon procedures for a client, but these do notThe client determines the nature, timing and extent ofThe assurance practitioner is an auditor working in public practice providingAn assurer must have the knowledge and expertise to assess the truth and fairness ofAuditors of financial reports need toAuditors should be independent of the client. Independent auditors have noThis means that not onlyA performance audit is an assessment of the economy, efficiency and effectiveness ofIt can be conducted internally (by internal audit) orManagement may request a performance audit of its own company (or part thereof) inFor example, the audit could examine aIt would assess the cost of running the department, the numberA performance audit could be conducted on a government department or agency asStakeholders of government entitiesPerformance auditing can expose poor practices, or evenPerformance auditing can provide information on theRegular performance auditing of governmentWhich internal auditor would be moreInternal auditors are employees of the company, and therefore cannot be completelyHowever, it is possible to increase the independence ofA well-funded internal audit department can investigate more issues and spend moreAn internal audit department with wide terms of reference has the freedom to pursueIf the internal audit department reports to the CFO it is possible that the CFO willThe audit committee is part ofTherefore, reporting to the audit committee increases theThe audit committee also deals with the external auditor. IfNot all companies have an audit committee. Where the audit committee does notWhen do you think an auditorAs defined in ASA 706 (ASA 706 (5)). A1.
Examples of circumstances where the auditor may consider it necessary toASA 706 stresses that the inclusion of an Emphasis of Matter paragraph in theAn emphasis of matter can beAs part of an emissions trading scheme; or. To inform investors and others on a voluntary basis. Voluntary disclosuresThe IAASB states that the focus is on an entity's GHG statement, it does not includeThe ISAE will also be ofThe AccountAbility organisation also provides guidance for sustainability assurance. AccountAbility issues AA1000AS (2008), which is an assurance standard forThe International Organization for Standardization (ISO) issues quality controlThe 14000 series addresses various aspects ofThese include the requirements and guidelines forThey also address specific environmentalISO 19011:2002 provides guidance on the principles of auditing, managing auditIt is applicable to all organizations needing to conduct internal or external audits of. The inspection processThe program finishes with an exit meeting and ASIC sends the audit firm aASIC publishes a public report summarising allCharter (May 2008), volume 79, No. 4: 66.)The FRC oversees the process for setting auditing standards. The AUASB sets theThe FRC appoints the members of the. AUASB. The ASIC Act prevents the FRC from becoming involved in technical issuesRequired:These paragraphs highlight to readers that the directors of the company and theThe directors are responsible forThe auditor’sIt states that in the auditor’s opinion theThis means that theThe auditor expresses a conclusion, not an opinion, in the review report. It is not anOther differences include. Interim report refers to AASB 134 on interim reporting, reference to IFRS in auditAudit report refers to audit of remuneration (the company does not make theseClose reading of the description of the work done by the auditor will reveal that theThis is theRequired.
Obtain a copy of the NAB’s 2011 annual report and find the disclosures on pageExtract from NAB’s 2011 Annual report, p 153. NAB shows separately the amount paid for audit fees, the amount paid for auditrelated fees, and the other fees. The audit-related fees are for work which isThe note to the disclosure explainsThe amount of non-audit service fees which relate to a regulatory requirement for. The non-audit service fee that was not due. The other fees paid by the group wereWhat is a financial report review. Why would a review be appropriate for a setA review provides limited assurance. The auditor does adequate work to reportTo be able to comment on the appropriateness of a review for half-yearly reports, theAssurance: reasonable vs. limited. Opinion: positive vs. negativeReports: annual reports vs.Conclusion: Half-yearly reporting is more limited than annual reporting and thus aRequired:Compare them on: (i)the range of services provided; (ii) geographic coverageThe solution will depend on the accounting firm chosen and the date of the analysis. However, the answers should show for the Big 4: greater geographic coverage, largerProviders of corporate sustainability assurance reports often state that the workAA1000AS (2008) is anAccountAbility Principles.The AA1000 Assurance Standard is based on assessment of reports against three. Assurance Principles. Materiality: does the sustainability report provide an account covering all the areas ofCompleteness: is the information complete and accurate enough to assess andResponsiveness: has the organisation responded coherently and consistently toFrom the text discussion of financial reporting.
Relevance: Information will be relevant if it has an impact on the decisions made byReliability: Information will be reliable when it is free from material misstatementsComparability: Users need to be able to trace an entity’s performance to identify anyUnderstandability: Users need to understand the information presented in order toConclusions:There are few standards in sustainability reporting andIn times of economic recession would you expect the demand for audits toWould you expect clients to shift from large (Big 4)Financial report audits are mandatory for most companies, so overall demand isFirst, costcutting would result in fewer audits. Second, organisations with less credible financialThis suggestsAlso, shifting from a mid-tier auditor to a Big 4 auditor would increase both costs andTherefore, it can be argued that firmsAnother reason the assurance is not absoluteAuditors cannot review every transaction andSome transactions and balances are difficult toProfessional scepticism is required of an auditor. It is an attitude that requires theThe auditor has a questioningThis does notUsually, there will be confirming evidenceManagers will not always try to deceiveThe auditor needs to be alert to the fact that some managersRequired. Visit the ASIC website and locate the guidance for meeting the regulatorySummarise those requirementsASIC, Regulatory Guide 180, Auditor Registration (September 2012), available at:The ASIC document explains how each of the qualifications, skills and personalFor example, the competency standards that are approvedFurther (and most recent) information about these standards can be found on theRequired. Write a report to Riley explaining (i) ASIC’s audit inspection program and (ii)Refer to review question 1.
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