Exam 1: The Demand for Audit and Other Assurance Services

George had a conversation with the accounting personnel and documented information about how the accounting systems function. He has also placed copies of accounting forms in his files. George is performing which task?

In the audit of an individual's tax return, the auditor should demonstrate competence in the use of

What impact is the presence of factors such as real-time information (such as via the Internet) expected to have upon the demand for assurance services?

Which of the following services results in assurance that the company's e-commerce activities on its website comply with Trust Services principles?

Two types of services provided by public accounting firms are audits and reviews. Discuss the similarities and differences between these two types of services. Which type provides the most assurance?

To do an audit, it is necessary to have information in a verifiable form and some criteria by which the auditor can evaluate the information. Required: A) What information and criteria would a public accounting firm use when auditing a company's financial statements? B) What information and criteria would a Canada Revenue Agency auditor use when auditing that same company's tax return? C) What information and criteria would an internal auditor use when performing an operational audit to evaluate whether the company's computerized payroll processing system is operating efficiently and effectively?

The Sarbanes-Oxley Act requires the auditor to attest to the

Blader Ng. Inc. has recently placed new air-cleaning systems in their smokestacks to meet air quality regulations. An auditing firm has been engaged to assess air quality and compare results to legislated requirements. What type of audit or engagement is the auditor conducting?

As a PA, you have been asked to prepare your sister Betty's year-end financial statements. Betty is a photographer and is the sole shareholder of a small company called Best Weddings Ltd. She photographs weddings, graduations, and schools, and earns about $75 000 per year. Betty has said that she only needs the financial statements for her tax returns and would like you to prepare the tax returns too. Required: A) Would you be able to prepare the financial statements for your sister? Why or why not? B) If yes, what type of report would you prepare to accompany the financial statements? C) Would you be able to prepare the tax returns for your sister? Why or why not?

Discuss the differences and similarities between the roles of accountants and auditors. What additional expertise must an auditor possess beyond that of an accountant?

Auditors General are responsible for auditing which types of organizations?

The reasoning behind the requirements of the Sarbanes Oxley Act's section 404 (attestation on internal control over financial reporting) is that

A typical objective of an operational audit is for the auditor to

Mega Manufacturing Company (Mega) is thinking about acquiring Localized Small Producer Inc. (LSP), a small manufacturing company that produces related products. Mega has examined the financial statements of LSP, which show only a small profit in the last five years. Management of LSP has taken reasonable salaries, and cost of goods sold is higher than the industry average for LSP. Mega believes that it will be able to introduce operational efficiencies at LSP, improving the profitability of the small company, if acquired. Required: A) What type of engagement should be conducted to assess the operational efficiencies of LSP? Justify your response. B) Who should be engaged to conduct the engagement? C) What major problems might the auditors encounter when conducting the audit and writing the report?

The need to implement philosophies and practices commonly referred to as "improved business practices" comes from

When do individuals and organizations typically need assurance services?

Who is responsible for developing financial statement audit and assurance standards in Canada?

Trust Services principles and criteria for controls relate to ensuring that

Which of the following organizations establishes ethical standards and standards for the practice of Internal Auditing?

A shareholder of a public Canadian firm can have access to the audited financial statements