chapter 1

Question 1

communication with those charged with governance (disapprove)

Answer 1

1. Disagreement with management
2. Noncompliance with laws and regulations, including illegal acts
3. Significant accounting policies adopted or changed by management
4. Adjustments -
5. Prior discussions with management
6. Problems getting evidence
7. Responsibilities of auditor under GAAS to obtain reasonable assurance
8. Other info
9. Views of other accountants
10. Estimates

Question 2

Engagement Letter (FACSIMILE)

Answer 2

• Fees
• Auditor’s resp. (GAAS)
• Confirmation of engagement
• Scope and obj. of engagement
  
  • statements auditing and obj is expressing opinion on FS
• Internal Control
• managements resp
  
  • prep and fair pres of FS
  • DIM of IC
  • access to info
• Irregularities - fraud
• iLlegal activities
• Errors

Question 3

Fraud Triangle

Answer 3

• Reason for motivation (incentive/pressure)
• Opportunity
• Rationalization