STRAYER ACC403 week 5 and 6 discussion

| November 24, 2016

week 5

“Minimizing Audit Risk” Please respond to the following:

According to the text, auditors have to make judgments concerning materiality on every audit. Since the auditing standards give no formal guidance for how to determine materiality, auditors must rely on their own experience. Determine at least two (2) qualitative factors that affect the auditor’s judgment. Provide a rationale for your response.
According to the text, auditors rely on the audit risk formula to determine the types and amount of audit evidence to collect in order to keep the overall audit risk of engagements to a minimum or below defined tolerable limits. Suggest an alternative to the audit risk equation in order to mitigate audit risk. Support your rationale with examples of the successful use of the alternative strategy.

week 6

“Management and Internal Control” Please respond to the following:

Create a scenario where external auditors determined that a company’s internal controls were deficient, but such a deficiency might not mean that a material weakness existed. Ascertain the impact on the audit plan if additional deficiencies are discovered on other related internal controls. Support your position.
From the e-Activity, identify the accounts that the fraud had affected, and analyze the auditor’s responsibility to detect fraud. Suggest key internal controls that would have either prevented or detected the fraudulent behavior or transactions. Justify your response.

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