Questions -

1. Assume that you are an auditor and as part of your routine audit, you discover a fraud being committed by the accounts receivable manager. The fraud is large enough to have a material impact on the financial statements. How does this finding affect the rest of your audit?

2. What type of report would an auditor issue after the client changes inventory methods from one year to the next to smooth income?

3. What is the appropriate action for an auditor who believes the client will not be able to remain as a going concern for more than another year?

4. What type of opinion would an auditor likely give for a retail firm that prevents the auditor from reviewing inventories and accounts receivable?

5. What type of evidence-gathering procedures would normally be used for accounts receivable?

6. What does the auditor accomplish by testing controls?

7. What is the difference between tracing and vouching?

8. Why do auditors use sampling?

9. What is sampling for attributes?

10. Why does the PCAOB require a separate but integrated audit of internal controls?

11. Are auditors responsible for finding material fraud?

12. How does internal auditing differ from external auditing?