Inherenet Limitations in Auditing: ZZZZ Best Company, Inc Essay

1023 Words Sep 19th, 2011 5 Pages
ZZZZ Best case case1.9 Q1 There are three different levels of services you could obtain from a certified public accountant. These are referred to as compilation, review, and audit. There are significant differences between the objectives of an audit of financial statements in accordance with generally accepted auditing standards and the objectives of a review in accordance with statements on standards for accounting and review services. The objective of an audit is to provide a reasonable basis for expressing an opinion regarding the financial statements taken as a whole. A review does not provide a basis for the expression of such an opinion because a review does not contemplate obtaining an understanding of the internal control …show more content…
If the successor auditor receives a limited response, its implications should be considered in deciding whether to accept the engagement.
Summarize the information successor auditor should obtain: The successor auditor should make specific and reasonable inquiries of the predecessor auditor regarding matters that will assist the successor auditor in determining whether to accept the engagement.
Matters subject to inquiry should include— • Information that might bear on the integrity of management. • Disagreements with management as to accounting principles, auditing procedures, or other similarly significant matters. • Communications to audit committees or others with equivalent authority and responsibility regarding fraud, illegal acts by clients, and internal-control-related matters. • The predecessor auditor's understanding as to the reasons for the change of auditors.
The successor auditor may wish to consider other reasonable inquiries.
Q5 ZZZZ Best use the confidential letter to limit the auditor from disclosing the location of building or any other information with respect to the project or the building, to any third parties or to any other members or employees of audit firm. Auditors were not allowed to make any follow-up telephone calls to any contractors, insurance companies, the building owner, or other individuals

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