ABC Electronics: An Instructional Case Illustrating Auditors' Use of Preliminary Analytical Procedures

2014 ◽  
Vol 8 (1) ◽  
pp. I1-I10 ◽  
Author(s):  
Paul M. Clikeman ◽  
Jamie Diaz
Keyword(s):  
Risk Assessment ◽  
Financial Statements ◽  
Consumer Electronics ◽  
Financial Statement ◽  
Planning Stage ◽  
Excel Spreadsheet ◽  
Financial Statement Audit ◽  
Analytical Procedures

SUMMARY This instructional case demonstrates auditors' use of analytical procedures during the planning/risk assessment phase of a financial statement audit. An Excel spreadsheet enables instructors to embed up to seven operating problems or potential accounting issues into a fictitious consumer electronics manufacturer's current year financial statements. Questionnaires from students at two universities indicate that the case is effective at helping undergraduate auditing students understand (1) auditors' use of analytical procedures during the planning stage of the audit, and (2) the types of accounting issues and operating problems that might be identified using analytical procedures.

Ramm Wholesale: Reviewing Audit Work (Retracted)

2013 ◽  
Vol 28 (3) ◽  
pp. 629-636 ◽  
Author(s):  
Douglas Kalesnikoff ◽  
Fred Phillips
Keyword(s):  
Risk Assessment ◽  
Real Time ◽  
Read Aloud ◽  
Financial Statement ◽  
Financial Statement Audit ◽  
Audit Strategy

ABSTRACT: Designed to be used in an undergraduate or Master's auditing course, this Case asks students to evaluate work performed on the financial statement audit of a private wholesale merchandiser. Through this evaluation, students can uncover issues relating to gaining knowledge of a client and its environment, risk assessment, materiality, audit strategy, and specific audit procedures for the revenue/receivables/receipts accounting cycle. The Teaching Notes provide support both for instructors who ask students to prepare the Case in advance of class and for instructors who instead assign the Case for analysis in real-time during class, whereby the Case is read aloud paragraph-by-paragraph and issues are discussed as they are detected.

Can Auditors Mitigate Information Asymmetry in M&As? An Empirical Analysis of the Method of Payment in Belgian Transactions

2013 ◽  
Vol 33 (1) ◽  
pp. 57-91 ◽  
Author(s):  
Mathieu Luypaert ◽  
Tom Van Caneghem
Keyword(s):  
Information Asymmetry ◽  
Private Information ◽  
Regression Models ◽  
Financial Statements ◽  
Financial Statement ◽  
Firm Characteristics ◽  
Target Level ◽  
Financial Statement Audit ◽  
Method Of Payment ◽  
The Relationship

SUMMARY In this paper, we empirically examine the relationship between the external financial statement audit and the method of payment across a sample of Belgian mergers and acquisitions between listed and private firms over the period 1997–2009. We investigate whether a Big N audit (at the target level) reduces the need for a contingent payment resulting from information asymmetry about the target's value. In addition, we analyze whether a Big N audit (at the bidder level) limits incentives for bidders to exploit private information about their own value. Using multivariate ordered probit and binary regression models, we determine that contingent payments are less common when the target is audited by a Big N auditor after controlling for several other deal and firm characteristics. Furthermore, we find that the incentive to use stock payments in periods of stock market overvaluation is lower for acquirers with a Big N auditor. Finally, target shareholders are more likely to accept a contingent offer if the acquirer's financial statements are certified by a Big N auditor. JEL Classifications: G34; M4.

Dickinson Technologies, Inc.: Assessing Control Environment and Fraud Risk

2003 ◽  
Vol 18 (1) ◽  
pp. 71-78 ◽  
Author(s):  
Christopher P. Agoglia ◽  
Kevin F. Brown ◽  
Dennis M. Hanno
Keyword(s):  
Risk Assessment ◽  
Internal Control ◽  
Financial Statement ◽  
Risk Assessments ◽  
Background Information ◽  
Control Environment ◽  
Abstract Concepts ◽  
Fraud Risk ◽  
Financial Statement Audit ◽  
Fraud Risk Assessments

This instructional case provides you an opportunity to perform realistic audit tasks using evidence obtained from an actual company. Through the use of engaging materials, the case helps you to develop an understanding of the control environment concepts presented in SAS No. 78 (AICPA 1995), Consideration of Internal Control in a Financial Statement Audit, and fraud risk assessment presented in SAS No. 99 (AICPA 2002), Consideration of Fraud in a Financial Statement Audit. This case involves making a series of fraud risk assessments based on company background information and a detailed and realistic control environment questionnaire, which provide you a context that makes the often abstract concepts relating to control environment and fraud risk assessment more concrete.

Financial statement audit: An investigation into laws and regulations

2020 ◽  
Vol 23 (4) ◽  
pp. 141-427
Author(s):  
S.V. Kozmenkova ◽  
V.I. Tsyganov
Keyword(s):  
Comparative Analysis ◽  
Financial Reporting ◽  
Russian Federation ◽  
Financial Statements ◽  
Theory And Practice ◽  
Financial Statement ◽  
International Standard ◽  
Legal Documents ◽  
Financial Statement Audit ◽  
The Russian Federation

Subject. This article deals with the matters related to the audit of financial statements. Objectives. The article aims to analyze the procedure for the study of financial and economic transactions in order to ensure compliance with legal documents regulating accounting and financial reporting. Methods. For the study, we used a comparative analysis, systematization, induction and deduction. Results. The article clarifies the objectives of financial statement audit, including verification of compliance of financial and economic transactions with the relevant regulations of the Russian Federation, as well as procedures for planning and documenting audit of financial statements based on the requirements of the International Standard on Auditing 250 (ISA 250) (revised). It also identifies problematic issues in the content of ISA 250 and formulates certain proposals to clarify it. Conclusions and Relevance. The article concludes that both the global and Russian audit practices require a thorough review of compliance of activities and financial reporting with the regulations in order to achieve the audit goal. The results presented can be applied in both audit theory and practice.

Analytical Procedures: A Data Envelopment Analysis Approach

2005 ◽  
Vol 2 (1) ◽  
pp. 17-31 ◽  
Author(s):  
Ehsan H. Feroz ◽  
Sungsoo Kim ◽  
Raymond L. Raab
Keyword(s):  
Data Envelopment Analysis ◽  
Oil And Gas ◽  
Analytical Procedure ◽  
Oil And Gas Industry ◽  
Financial Statements ◽  
Risk Level ◽  
Data Envelopment ◽  
Gas Industry ◽  
Planning Stage ◽  
Analytical Procedures

In this paper, we demonstrate the usefulness of Data Envelopment Analysis (DEA) as an analytical procedure for auditors, especially in the planning stage of the audit, to determine the extent of audit and to assess the preliminary risk level of the client. We believe that DEA can also be used in the overall review stage to detect any anomalies and to assess the reasonableness of financial statements. DEA-based analytical procedures can provide consistent and reliable red ags and benchmarks for auditors to compare a client to other firms in the same industry. We provide an illustrative use of DEA as an analytical procedure for auditing a client in the oil and gas industry. We also provide validation for DEA as an analytical procedure.

scholarly journals The use of analytical procedures at the audit planning stage

2021 ◽  
pp. 31-38
Author(s):  
A. S. Bikteubayeva ◽  
K. Zh. Elshibekova
Keyword(s):  
Financial Reporting ◽  
Financial Stability ◽  
Financial Statements ◽  
Timely Manner ◽  
Planning Stage ◽  
Audit Planning ◽  
Minimal Time ◽  
Express Analysis ◽  
Analytical Procedures ◽  
Audit Program

The article considers the main stages of an audit. They allow to achieve the main goal of audit planning, that is, the implementation of a reporting test to identify possible errors; reporting testing for probable errors; horizontal and vertical analysis and "reading" of reports; express analysis of reporting. At the stage of planning the audit, after the disclosure of inconsistencies in the forms of financial statements, significant changes in the dynamics and structure, it is possible to determine the coefficients and at the same time the method of express analysis of the statements is used. The article focuses on the main mistakes in financial reporting. The main ratios for the analysis of financial statements are also given: liquidity ratios; financial stability; turnover; profitability. The analytical procedures presented in the article, which are guided by auditors at the stage of planning an audit, can be divided into the following groups. In addition, the division of audit procedures helps to identify problems in the provided information in a timely manner when disclosing it in the financial statements, and is aimed at identifying audit risks at the substantive stage. The use of analytical procedures at the stage of planning an audit allows you to create an audit program with minimal time costs, reduce the risks of problems that are associated with a lack of time and skills of personnel.

scholarly journals ANALISIS OPINI AUDIT TERHADAP KINERJA ORGANISASI

2018 ◽  
Vol 9 (1) ◽  
pp. 104-115
Author(s):  
Sunarmin Sunarmin
Keyword(s):  
Significant Influence ◽  
Financial Statements ◽  
Financial Statement ◽  
Audit Report ◽  
Non Profit ◽  
Audit Opinion ◽  
Community Institution ◽  
Financial Statement Audit ◽  
Public Company ◽  
Government Institution

Financial Statement Audit is an audit conducted by an independent auditor of the financial statements presented by his client to express an opinion on the fairness of the financial statements. The audit report is a formal medium used by the auditor to communicate to interested parties about the conclusions of the audited financial statements. In issuing the audit report, the auditor must comply with the 4 reporting standards set forth in the generally accepted auditing standards.This analysis is a review of several sources, including from manuals, published studies, legislation published by state organizers as well as some information from media news. This analysis is much related to the phenomenon that has become a source of news in June 2017 and related to the role, function and benefits of the opinion audit conducted by external audit of the organization, both non-profit objectives and expanded to profit organizations. This analysis aims to be more convincing whether there is a significant influence on audit opinion on organizational performance.The result of this analysis can be concluded that, the existence of audit opinion from result of examination conducted by independent accountant, apparently have a very significant influence to the good performance for non-profit organization (government institution, community institution), or profit organization (public company).

scholarly journals A Task-Centered, Multiple Method Approach To Teaching Fraud Risk Assessment

2011 ◽  
Vol 3 (3) ◽  
Author(s):  
Bonnie W. Morris ◽  
Ann B. Pushkin ◽  
William E. Spangler
Keyword(s):  
Risk Assessment ◽  
Financial Reporting ◽  
Financial Statement ◽  
Occurrence Rate ◽  
Fraudulent Financial Reporting ◽  
Fraud Risk ◽  
Financial Statement Audit ◽  
Multiple Method ◽  
Approach To Teaching ◽  
Research In Education

This manuscript provides an approach to teaching fraud risk assessment that is based on an analysis of the task and relevant research in education, cognitive psychology, and artificial intelligence. Fraud risk assessment (FRA) in financial reporting is an important and difficult task that must be performed in every financial statement audit. When auditors fail to detect fraudulent financial reporting (FFR), they are likely to become targets of shareholder and creditor litigation. Although FFR has a low occurrence rate considering the large number of financial statement audits conducted, it has a devastating impact on the investors, creditors and the profession.

scholarly journals Comments on Discussion Paper: Fraud and Going Concern in an Audit of Financial Statements: Exploring the Differences Between Public Perceptions About the Role of the Auditor and the Auditor’s Responsibilities in a Financial Statement Audit

2021 ◽  
Author(s):  
Tammie J Schaefer ◽  
Veena L Brown ◽  
Matthew S. Ege ◽  
Noel Harding ◽  
Dana R. Hermanson ◽  
...  
Keyword(s):  
Financial Statements ◽  
Public Perceptions ◽  
Research Literature ◽  
Financial Statement ◽  
Sufficient Time ◽  
Discussion Paper ◽  
Going Concern ◽  
Financial Statement Audit ◽  
External Reporting

We commend the International Auditing and Assurance Standards Board (the Board) on its efforts to determine “whether the auditing standards related to fraud and going concern need to be updated to reflect the rapidly evolving external reporting landscape.” We especially commend the Board on the timeliness of the call for input into these issues in that there is sufficient time to conduct research to further inform questions raised in the Discussion Paper and the questions that will inevitably arise as deliberations continue and progress is made on the project. We note below insights from the extant research literature as they relate to the questions posed in the Discussion Paper, but there remain many unanswered questions. We believe that many members of the Auditing Section of the American Accounting Association stand ready to work with the Board and other stakeholders to inform deliberations in this area.

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