AC410 Unit 9 Assignment
18–29. The CPA firm of Carson & Boggs LLP is performing an internal control audit in accordance with PCAOB Standard No. 5. The partner in charge of the engagement has asked you to explain the process of determining which controls to test. Describe the process, presenting each of the links in this process and a short summary of how the auditors approach each of them.
v Identify significant accounts and disclosures – An account is significant if there is a reasonable possibility that it could contain a misstatement that alone or in conjunction with others has a material effect on the financial statements (Whittington,2012).
Bill Jensen, a staff member of Zhan & Co., CPAs, has given you the following list of what he refers to as “internal control deficiencies” for the Zabling Co. audit and has asked you to review each point and make certain that you agree that each is an internal control deficiency.
For each of the following items, reply A (Agree) or D (Disagree) indicating whether the item represents an internal control deficiency.
18–35. Match the following definitions (or partial definitions) to the appropriate term. Each term may be used once or not at all.
18–36. Your working papers for an integrated audit being performed under PCAOB Standard No. 5 include the narrative description below of the cash receipts and billing portions of internal control of Slingsdale Building Supplies, Inc. Slingsdale is a single-store retailer that sells a variety of tools, garden supplies, lumber, small appliances, and electrical fixtures to the public, although about half of Slingsdale’s sales are to construction contractors on account.