Auditing discussion questions

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Explain the relationships among audit services, attestation services, and assurance services, and give an example of each.What are the purposes of the scope paragraph in the auditor’s report? Identify the most important information included in the scope paragraph.  Explain the importance.

Distinguish between the terms errors and fraud. Explain why auditors need an understanding of the client’s industry.

What are the purposes of preliminary analytical procedures? What types of comparisons are useful when performing preliminary analytical procedures

Explain why the auditor can be persuaded only with a reasonable level of assurance, rather than convinced, that the financial statements are correct

Management must identify the framework used to evaluate the effectiveness of internal control over financial reporting. What framework is used by most U.S. public companies?

Explain the importance of proper credit approval for sales. What effect do adequate controls in the credit function have on the auditor’s evidence accumulation?

BestSellers.com sells fiction and nonfiction books to customers through the company’s Web site.  Customers place orders for books via the Web site by providing their name, address, credit card number, and expiration date. What internal controls could BestSellers.com implement to ensure that shipments of books occur only for customers who have the ability to pay for those books? At what point would BestSellers.com be able to record the sale as revenue?

Explain why most auditors consider the receipt of goods and services the most important point in the acquisition and payment cycle.