ACCT 401 Saudi Electronic University Auditing Principles and Procedures Discussion

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Business Finance

ACCT 401

Saudi electronic university

ACCT

Description

IMPORTANT NOTE: Answer in your own words, DO NOT COPY from slides or fellow student.

1- There are several types of audit services that are provided by auditors. Identify and define three of these types of audits. (1.5 Marks).

2- How would an auditor identify related parties and what is the importance of doing so. (0.5 Mark).

3- During the audit of Bader Financial, you find that some accounting entries have been Changed. You believe this may be the result of management fraud and you have determined that the effect of this could be material to the financial statements. What steps should you take in response to the accounting entries and your concern about management fraud. Detail your answer. (1 Mark).

4- The auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error of fraud. Explain the previous statement, and why an auditor cannot provide absolute assurance? Support your answer with a clear example explaining your answer. (2 Marks).

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Explanation & Answer

Attached.

Outline: Auditing
Thesis Statement: This paper attempts to answer four auditing questions and issues that face
auditors in the contemporary corporate world.
I.

QUESTION 1
A. Types of auditing
1. External auditing
2. Internal auditing
3. IRS auditing

II.

QUESTION 2
A. Identifying related parties
1. Procedure
B. Importance

III.

QUESTION 3
A. Management fraud
1. Response
2. Concern

IV.

QUESTION 4
A. Reasonable assurance
1. Responsibility
2. Why auditors cannot ascertain absolute assurance

V.

REFERENCES


Running head: AUDITING

1

Auditing
Name
Institution

AUDITING

2

Auditing
Question 1
Contemporary auditing services are categorized into three types namely: internal,
external, and the Internal Revenue Service (IRS) audits (Tuovila, 2020). External audits are
performed by outside parties that aim at identifying and finding any bias, error, or misstatement
in financial statements and documents. Companies hire external auditors to comprehensively
examine and scrutinize their operations, thus increasing stakeholder confidence, trust, and loyalty
(Sarapaivanich & Patterson, 2015). Positive external audit reports usually instill customer and
stakeholder confidence towards a firm. External audits bestow a company's transparency towards
its customers and stakeholders. External audit reports primarily determine a company's brand
image. On the other hand, internal audits are conducted either by the employees of a company.
Consultant auditors also conduct internal audits in cases where companies lack sufficient inhouse resources for internal auditing. Internal audit reports aim at monitoring internal
developments and controls. In many cases, internal audits are submitted directly to ...


Anonymous
Very useful material for studying!

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