Model Audit

This standardized model, which has remained largely unchanged since the 1930s, is considered by many to be a pass/fail model. This is analogous to a pass/fail option when taking a college course. When grades are reported at the end of the semester, there is no distinguishing the effort of an A student from the lack of effort of a C- student. Much of the auditor work and judgment is not reflected in the current model. The concept of the expectations gap was introduced…

1. Should auditors evaluate the soundness of a client’s business model? Defend your answer. We are in agreeance that auditors should evaluate the soundness of a client’s business model. This would be an essential part of auditor’s inherent risk assessment process. The risk assessment is to understand the entity, its environment, and internal control to identify and assess the risk of material misstatement whether due to fraud or error at the financial statement and relevant assertion levels…

internal control of the company. Internal controls are to be tested for design, efficiency and operational effectiveness. The details of internal controls tested are not seen in the work papers. In addition, the nature, timing and extent of further audit procedures in not available. There was no sufficient understanding of the client’s process of gathering, updating and analyzing information. The auditor’s should improve on their analysis of the internal control of the company and get to…

The source of problem for Bausch and Lomb was the chief executive, Daniel Gill. Gill created great pressure for the employees of B&L to generate revenue. He wanted to increase sales at any cost. In regards to the audit risk model, the inherent risk was very high. The reasoning behind the risk was due to the measures taken by the chief executive to improve sales. The only way to generate sales to please Gill however was by recognizing revenue that was not recognizable. On the other hand,…

Audit Group Case 4, Billy’s Beats Billy’s Beats Inc. Completing the Audit Due Date: December 10 by 8PM Please read the instructions below carefully. Failure to follow these instructions may adversely affect your grade for this assignment. As outlined in the syllabus, the penalty for unexcused late assignments is 10% of the maximum points for each day that the assignment is late, and no assignment will be accepted after three days from its due date. • Read the case and the “Required” section…

Evaluating Cost Reductions PPC is a small public plastics manufacturing organization which. The organization first became a publicly listed organization three years ago, and has experienced a large impact of the recent recession. The organization has taken several steps within the past year to reduce costs. The question has arisen as to whether said cost reduction actions are an operation issue or a control deficiency, of if said cost reductions are a material weakness or a significant…

This project goal is to make the standards very similar and comparable for public, non-public and international auditors. Yet, there are some differences that still exist related to some audit requirements and language variation . One of these standards is that is considered part of the risk assessment process is “Audit Planning Standard”. The risk assessment and responses to assessed risks is one of the sections GAAP and ISAs differ on . The standard includes an introduction, objectives,…

Audit risk evaluation and planning materiality for the audit of “2016 Annual Report” Toshiba Corporation A. Introduction The auditor must assess client risk and perform audit planning after accepting client engagement. The assessment includes understanding the client, identifying factors impact the risk of a material misstatement, performing a risk and materiality assessment and developing an audit strategy (Moroney, Campbell, & Hamilton, 2014). This essay will discuss what the inherent risk…

Enron is considered to be one of the biggest audit failures of it’s time but who is really responsible for the downfall of this company? While watching the play and the documentary I felt like I was getting two different stories from two different perspectives. The main differences I noticed between the play and the documentary was how Jeffrey Skilling was portrayed and how effective the information was presented. Overall, I believe that I understood of the story of Enron more once I left the…

Abstract The ultimate goal of this paper is to emphasize the importance of supply chain management and point out the negative effects of an insufficient supplier management by investigating the failure of Boeing 787 “The Dreamliner”. Research of this topic was deeply conducted using trusted and proved resources from Google Scholar, academic articles and government websites. This paper aims to look at demonstrating the analysis, findings and recommendations for Boeing’s 787 supplier issues.…