Auditing Chapter 1

Which of the following accounting firms failed in 2002 because the firm lost its reputation as a high-quality objective auditor? Deloitte Arthur Andersen KPMG Ernst & Young

Arthur Andersen

Who has the responsibility for forming an audit team? Audit Partner Audit Manager Audit Senior/In-charge Audit Associate

Audit Partner Audit Manager

Which of the following is a type of attest service? Financial planning Consulting Auditing Assurance services

Auditing

The underlying accounting data and any additional information available to the auditor, whether originating from the client or externally is the definition of Blank 1 of 2 Blank 2 of 2. (Enter only one word per blank.)

Blank 1: audit Blank 2: evidence

Enhanced transparency of transactions, increased operating efficiency, and greater reliability of data and data trails are all results of the use of Blank 1 of 1 technology. (Enter only one word per blank.)

Blank 1: blockchain

The use of decentralized, distributed digital ledgers that record economic transactions is allowed by Blank 1 of 1 technology. (Enter only one word per blank.)

Blank 1: blockchain

Because goals may not coincide, there is a natural Blank of Blank between managers and absentee owners.

Blank 1: conflict Blank 2: interest

A lawsuit in progress against a company is an example of a(n) Blank 1 of 2 Blank 2 of 2 that needs to be considered when completing an audit. (Enter only one word per blank.)

Blank 1: contingent Blank 2: liability

Entities must design and implement Blank 1Blank 1 to ensure that transactions are initiated, captured, recorded and summarized appropriately in the entity's accounting system.

Blank 1: controls, internal controls, or internal control

If the scope limitation is so pervasive that it limits the ability of the auditor to conclude on the financial statements as a whole, the auditor will issue a(n) Blank 1 of 1 of opinion. (Enter only one word per blank.)

Blank 1: disclaimer

Much of what auditors do revolves around collecting and evaluating evidence about management's Blank 1 of 3 Blank 2 of 3 Blank 3 of 3. (Enter only one word per blank.)

Blank 1: financial Blank 2: statement Blank 3: assertions

The risk that information circulated by a company's management will be false or misleading is called

Blank 1: information Blank 2: risk

Data analytics is rapidly redefining the concepts of discovering and analyzing Blank 1 of 2 and Blank 2 of 2 in data. (Enter only one word per blank.)

Blank 1: patterns Blank 2: anomalies

To increase the likelihood that a sample is representative of the population of transactions or account items, auditors use Blank 1Blank 1 sampling procedures. (Enter only one word per blank.)

Blank 1: random

The basis for opinion section of the audit report emphasizes the fact that the audit provides only Blank 1 of 2 Blank 2 of 2 that the financial statements contain no material misstatements, whether due to error or fraud. (Enter only one word per blank.)

Blank 1: reasonable Blank 2: assurance

Whether the audit evidence relates to the specific management assertion being tested is the basis of Blank 1 of 2, while Blank 2 of 2refers to the diagnosticity of the evidence. (Enter only one word per blank.)

Blank 1: relevance Blank 2: reliability

When the financial statements are free of material misstatement and the auditor does not find it necessary to specify any exceptions to a "clean" audit opinion, the audit report issued is Blank 1 of 1. (Enter only one word per blank.)

Blank 1: unqualified or unmodified

Identify management assertions concerning classes of transactions and events for the period under audit. Completeness Existence Accuracy Occurrence Rights and Obligations Authorization

Completeness Accuracy Occurrence Authorization

Which of the following management assertions are made about both classes of transactions and events and account balances? Existence Presentation Occurrence Accuracy Classification

Presentation Accuracy Classification

What paragraph of the audit report expresses the auditor's judgment that the audit provides a reasonable basis for the opinion to be expressed? Scope Opinion Critical Audit Matters Explanatory

Scope

Which of the following have given rise to an explosion in the demand for the assurance provided by auditors? A decrease in the number of sole proprietorships The development of the corporate form of business The development of limited Liability Companies The expanding world economy

The development of the corporate form of business The expanding world economy

Presentation

Transactions and events are appropriately aggregated or dis-aggregated and clearly described, and related disclosures are relevant and understandable in the context of the requirements of the applicable financial reporting framework.

True or false: The auditor's report, also known as the audit opinion, is the main product or output of the audit. True False

True Reason: This is the final phase and the way the auditor communicates his or her findings.

Authorization

all transactions and events have been properly authorized

Existence

assets, liabilities, and equity interests exist

The systematic process approach to auditing involves ______. auditor objectivity proving that management assertions are correct evaluating audit evidence searching for audit evidence

auditor objectivity evaluating audit evidence searching for audit evidence

The report on ICFR ______. must be combined with the financial statement audit must be presented separately can be combined with the financial statement audit or presented separately

can be combined with the financial statement audit or presented separately

On most financial statement audits, the majority of time is spent ______. determining materiality assessments auditing internal control over financial reporting evaluating audit evidence conducting planned audit tests

conducting planned audit tests

Confirming the balance of a specific customer's outstanding accounts receivable balance is an example of ______ information. indirect direct material

direct

The final phase in the audit process is to ______. evaluate the results and issue an audit report discuss findings with the audit committee complete the audit audit business processes and related accounts

evaluate the results and issue an audit report

Rapid advances in electronic technologies used by many businesses ______. eliminates many risks associated with the audit facilitates efficient corroboration of the reliability of data can create automatic audit trails

facilitates efficient corroboration of the reliability of data can create automatic audit trails

Once the auditor has obtained sufficient appropriate evidence that the management assertions can be relied upon for each significant account and disclosure, the auditor has reasonable assurance that the financial statements are ______ presented. correctly materially fairly accurately

fairly

A very small difference that is unlikely to affect an investor's decisions in a significant manner is deemed to be ______. material an audit risk immaterial

immaterial

The demand for assurance services comes from ________ between managers and owners or managers and potential investors. tax information requirements cooperation information asymmetry conflicts of interest

information asymmetry conflicts of interest

Increasing use of audit data analytics _______ auditors' ability to ask the right questions and evaluate the answers yielded by the data. has no effect on the places a greater premium on reduces the need for the

places a greater premium on

If an auditor assesses a larger level of materiality amount for an account, they will need a ______ sample than if materiality were a smaller amount. larger smaller

smaller

Completeness

all transactions and events that should have been recorded have been recorded, and all related disclosures that should have been included in the financial statements have been included.

In order to reach and justify a conclusion on the fairness of the financial statements, an auditor must obtain evidence that is ______. appropriate reliable sufficient material readily available

appropriate reliable sufficient

The body of an audit report begins with a section that indicates the ______. name of the company being audited fees collected by the auditor financial statement covered by the report auditor's opinion regarding the fairness of the financial statements market value of the company's assets and securities

name of the company being audited financial statement covered by the report auditor's opinion regarding the fairness of the financial statements

The most common type of audit report (opinion) issued by auditors is a(n) ______ opinion. disclaimer of unqualified adverse qualified

unqualified

Professional standards require that public accounting firms establish policies and procedures for deciding ______. how to set their audit fees whether to accept new clients if current clients should be retained the number of auditors to use for an engagement

whether to accept new clients if current clients should be retained

In the context of a financial statement audit, generally accepted accounting principles usually serve as the established Blank 1Blank 1 , Incorrect Unavailable for assessing management assertions. (Enter only one word per blank.)

Blank 1: criteria

In order to develop and support an audit opinion, the auditor must obtain an understanding of the client's ______. board of directors internal auditors risks information systems business and industry

risks information systems business and industry

The audit report is addressed to the ______. Chief Executive Officer management and audit committee shareholders and board of directors

shareholders and board of directors

Auditing helps ensure that information is ______. relevant credible reliable completely accurate

relevant credible reliable

Learning auditing essentially helps to understand how to gather and assess evidence as you can evaluate Blank 1 of 1 (or claims) made by others. (Enter only one word per blank.)

assertions

Independent professional services that improve the quality of information, or its context, for decision makers are called ______ services. auditing assurance attest

assurance

The Blank provided by auditing is vital to the proper functioning of an economic system. (Enter only one word per blank.)

assurance

Multiple Choice Question The focus of the FASB's definition of materiality is on __. auditors company management financial statement users the board of directors

financial statement users

Designing procedures to test whether an entity's internal control over financial transactions is effective, allows the auditor to obtain ______ information regarding whether account balances are fairly stated indirect direct

indirect

Until the late 18th and early 19th centuries, most organizations were relatively small and were owned and operated as sole proprietorships or ______. partnerships corporations limited liability companies

partnerships

The increased used of data analytics in auditing ______. makes it less important for audit professionals to reason through challenging concepts requires the ability to query, manipulate and interpret information streamlines some tedious audit tasks requires the auditor to be an expert in technology and computer programming

requires the ability to query, manipulate and interpret information streamlines some tedious audit tasks

The scope paragraph for a public company refers to ______. standards of the PCAOB generally accepted auditing standards generally accepted accounting standards

standards of the PCAOB

The quantity of evidence the auditor obtains is the basis of ______. reliability relevance appropriateness sufficiency

sufficiency

Rights and Obligations

the entity holds or controls the rights to assets, and liabilities are the obligations of the entity

Companies are required to include critical audit matters beginning in audit reports for fiscal year ends on of after December 15, ______. 2018 2020 2025

2020

Which of the following statements are correct? A common rule of thumb is that misstatements of more than 3% - 5% of income is considered material. A clean audit opinion can be issued even if the auditor believes there are some immaterial misstatements. The auditor provides assurance that all immaterial misstatement will be detected. The auditor cannot guarantee that all material misstatements will be uncovered.

A common rule of thumb is that misstatements of more than 3% - 5% of income is considered material. A clean audit opinion can be issued even if the auditor believes there are some immaterial misstatements. The auditor cannot guarantee that all material misstatements will be uncovered.

True or false: Some of the most important assertions entities make to investors are implicit in the audit opinion. True False

False Reason: The assertions are implicit in the financial statements.

Question Mode True or False Question True or false: The audit definition phrase "communicating the results to interested users" implies that all audit reports must be suitable for use for any and all individuals who may want to see the information. True False

False Reason: This phase relates to the report the auditor provides to the intended users of the reported information.

True or false: Before accepting a new audit client, the auditor is required to conduct a background check on top management.

False Reason: While an auditor may choose to do this is is not required. The auditor is required to confer with the predecessor auditor.

True or false: Most audit opinions are qualified because it is common for auditors to find misstatements that need correction. True False

False Reason: While it is common to find misstatements, most clients make the adjustments necessary to receive a clean opinion.

Which of the following statements are correct? Setting the scope of the audit requires an understanding of the quality of the entity's internal controls. To ensure the audit runs smoothly, it is preferable to have members of the audit team that have personal relationships with the client. The auditor must update his or her understanding of the entity to put together the appropriate audit team. Specialists other than auditors may be required on some audit teams.

Setting the scope of the audit requires an understanding of the quality of the entity's internal controls. The auditor must update his or her understanding of the entity to put together the appropriate audit team. Specialists other than auditors may be required on some audit teams.

Cutoff

Transactions and events have been recorded in the correct accounting period

Occurrence

Transactions and events that have been recorded or disclosed have occurred, and such transactions and events pertain to the entity.

As the amount of capital involved and the number of potential owners increase, the potential impact of ______ also increases. owning stock compensation accountability conformity

accountability

When business owners hire others to manage their business, the demand for auditing can be understood as the need for ______. benchmarking performance evaluation accountability

accountability

Professional managers hired by owners to run the corporation on a day-to-day basis are referred to as ______. agents stewards stockholders principals

agents

The body of an audit report begins with a section that indicates the ______. auditor's opinion regarding the fairness of the financial statements fees collected by the auditor name of the company being audited market value of the company's assets and securities financial statement covered by the report

auditor's opinion regarding the fairness of the financial statements name of the company being audited financial statement covered by the report

Reducing information risk potentially ______. costs both the owner and the manager costs the owner and benefits the manager benefits the owner and costs the manager benefits both the owner and the manager

benefits both the owner and the manager

Auditors usually organize audits by grouping financial statement accounts according to the ______. dollar value of the accounts number of transactions in the accounts location of the accounts on the financial statements business processes that primarily affect those accounts

business processes that primarily affect those accounts

Information asymmetry and conflicts of interest exist between ______. managers and company employees buyers and sellers managers and potential investors

buyers and sellers managers and potential investors

For an audit report to be unqualified ______. client financial statements must be free of material departures from GAAP there must be no significant limitations imposed on the auditor's procedures management must agree completely with the findings of the auditors the audit must be done in accordance with applicable standards the auditor must be independent the board of directors must sign the audit opinion

client financial statements must be free of material departures from GAAP there must be no significant limitations imposed on the auditor's procedures the audit must be done in accordance with applicable standards the auditor must be independent

Predictive audit data analysis __. combines firm, industry and market data to help auditors identify numbers that might be off presents data to users in ways that match their various needs and interests allows auditors to analyze and understand enormous sets of information

combines firm, industry and market data to help auditors identify numbers that might be off

Capital markets allow public companies to raise the investment capital necessary in order to ______. fund technology expand to new markets improve credit ratings increase managerial compensation fund equipment needed finance research and development

fund technology expand to new markets fund equipment needed finance research and development

The paragraph containing the auditor's opinion: indicates how the audit was conducted indicates the criteria used to assess management assertions emphasizes the concept of materiality

indicates the criteria used to assess management assertions emphasizes the concept of materiality

Designing procedures to test whether transactions were captured and properly handled, allows the auditor to obtain ______ information about whether an ending account balance is likely to be fairly stated. indirect direct

indirect

The focus of audit evidence collection ______. is generally left to the auditor's discretion is based on the fee the client is being charged depends on the circumstances of the audit should always be on the account balances themselves

is generally left to the auditor's discretion depends on the circumstances of the audit

The critical audit matters section of the audit report ______. is optional until fiscal years ending after December 15, 2018 only includes issues reported to the audit committee includes all issues involving especially challenging, subjective, or complex auditor judgment includes information on auditor response to the matters

only includes issues reported to the audit committee includes information on auditor response to the matters

Auditing is demanded because it ______. ensures that companies can raise capital plays a valuable role in monitoring contractual relationships is a form of job security for accountants is required by federal law for all companies

plays a valuable role in monitoring contractual relationships

Owners who are not directly involved in running the business are referred to as ______. principals stockholders stewards agents

principals stockholders

To ensure the audit is conducted effectively and efficiently it is important to ______. properly plan the audit discuss the audit with the board of directors ensure all audit team members have worked on the audit before

properly plan the audit

The auditor is responsible to report on the company's internal control over financial reporting for ___ companies all non-for-profit public

public

When an auditor reports that the financial statements are fairly stated except for a misstatement identified in the inventory account, a(n) ______ opinion should be issued. qualified unqualified adverse disclaimer of

qualified

Auditors don't test all account balances and transactions due to ______. auditing standards time constraints and requirements cost and infeasibility

time constraints and requirements cost and infeasibility

The aspects of information reflected in the financial statements are ______ and related disclosures. transactions materiality account balances profitability

transactions account balances

Classification

transactions and events have been recorded in the proper accounts

If a misstatement is considered so material that it pervasively affects the interpretation of the financial statements, the auditor will issue a(n) Blank 1 of 1 opinion, indicating that the financial statements are not fairly stated and should not be relied upon. (Enter only one word per blank.)

Blank 1: adverse

The opinion section of the audit report contains the phrase "in all Blank 1 of 2 Blank 2 of 2" emphasizing the auditor is only responsible for detecting misstatements large enough to affect the decisions of a reasonable financial statement user. (Enter only one word per blank.)

Blank 1: material Blank 2: respects

Audit data analytics is using analysis, Blank 1 of 2, and Blank 2 of 2 to discover and analyze patterns, anomalies, and other information in data in the context of the audit. (Enter only one word per blank.)

Blank 1: modeling Blank 2: visualization

If an auditor is unable to obtain all the necessary information to conclude if an account balance is fairly stated a(n) Blank 1 of 2 Blank 2 of 2 exists. (Enter only one word per blank.)

Blank 1: scope Blank 2: limitation

Financial statement Blank 1 of 1 are management's expressed or implied claims about information reflected in the financial statements. (Enter only one word per blank.)

assertions

he end product of an auditor's work is the ______. audit opinion materiality assessment financial statements engagement letter

audit opinion

The conceptual and procedural details of a financial statement audit build on which three fundamental concepts? audit risk materiality attestation assurance evidence

audit risk materiality evidence

The title of the audit report refers to the ______ of the public accounting firm that conducted the audit. qualifications integrity independence objectivity

independence

If the audited financial statements include material uncorrected misstatements that the client refuses to correct, the auditor will ______. withdraw from the audit engagement and not issue a report issue an unqualified audit report that explains the nature of the misstatement issue an opinion that the financial statements are materially misstated

issue an opinion that the financial statements are materially misstated

If a client's financial statements include insignificant misstatements that do not cause the financial statements to be materially misstated, the auditor will ______. not issue an audit report issue a qualified audit report issue an unqualified audit report

issue an unqualified audit report

When a manager is honest, _____. there is no need for audit services the owner likely will not want to invest in audit services it may be in the manager's self-interest to hire an auditor it is in the manager's self-interest to ensure an auditor is not hired

it may be in the manager's self-interest to hire an auditor

The audit report date indicates the ______. date of the financial statements that were examined in the audit start date of the audit period covered by the report last day of the auditor's responsibility for audit review

last day of the auditor's responsibility for audit review

For a company, the impacts of purchasing the assurance provided by an audit include ______. lower interest rates providing assurance to thousands of potential investors the ability to sell stocks and bonds at more favorable prices an overall increase in the cost of capital

lower interest rates providing assurance to thousands of potential investors the ability to sell stocks and bonds at more favorable prices

The audit report concludes with the ______. signature of the CPA firm providing the audit signatures of the audit committee members city and state of the corporation's headquarters year the auditor began serving as the company auditor date of the report

signature of the CPA firm providing the audit year the auditor began serving as the company auditor date of the report

In a small business, auditors do not examine all transactions due to ______. the inability to issue the audit report in a reasonable amount of time the cost of such an extensive audit the infeasibility of such an extensive audit materiality assessments

the cost of such an extensive audit

Identify the three different stages in which an auditor can collect evidence in an accounting system to help determine whether the financial statements are fairly stated. Notes to the financial statements Internal Controls Transactions Ending Account Balances

Internal Controls Transactions Ending Account Balances

Accuracy

Amounts and other Data relating to recorded transactions and events have been recorded appropriately, and related disclosures have been appropriately measured and described.

Accuracy/Valuation and Allocation

Assets, liabilities, and equity interests have been included in the financial statements at appropriate amounts, and any resulting valuation or allocation adjustments have been appropriately recorded, and related disclosures have been appropriately measured and described.

These occur when a practitioner is engaged to issue a report on subject matter that is the responsibility of another party. Assurance services Attest services Accounting services

Attest services

Which of the following statements are true. Today audits are rarely utilized in situations where they are not required by law. Audits were in demand long before securities laws required them. In 1926 only about 10% of companies on the New York Stock Exchange were audited by independent auditors. Some forms of accounting and auditing existed in Greece as early as 500 BC.

Audits were in demand long before securities laws required them. Some forms of accounting and auditing existed in Greece as early as 500 BC.

In order to plan the audit properly, the audit team must make a preliminary assessment of the client's Blank 1 of 2 risks and determine Blank 2 of 2. (Enter only one word per blank.)

Blank 1: business Blank 2: materiality

A common rule of thumb is that total (aggregated) misstatements of more than about Blank 1 of 1 percent of income before tax would cause the financial statements to be materially misstated. (Enter only one word per blank.)

Blank 1: five or 5

The amount by which a set of financial statements could be misstated without affecting the judgment of a reasonable person is referred to as Blank 1 of 1. (Enter only one word per blank.)

Blank 1: materiality

The concept of Blank 1 of 1 is important because it isn't practical or cost beneficial for auditors to ensure financial statements are completely free of any small misstatements.

Blank 1: materiality

The auditor's assessments of Blank 1 of 3 and Blank 2 of 3 Blank 3 of 3influence the nature, timing and extent of the audit evidence to be gathered. (Enter only one word per blank.)

Blank 1: materiality Blank 2: audit Blank 3: risk

Extending auditors' activities to assurance services allows reporting not only on the reliability and credibility of information but also on the Blank 1 of 2 and Blank 2 of 2 of that information. (Enter only one word per answer blank.)

Blank 1: relevance Blank 2: timeliness

Accounting professionals can perform various services that provide assurance about the Blank 1 of 2 and Blank 2 of 2 of information given by one party to another. (Enter only one word per blank.)

Blank 1: reliability Blank 2: relevance

The fact that there should be a well-planned and thorough approach for conducting the audit is implied by the phrase Blank 1 of 2 Blank 2 of 2. (Enter only one word per blank.)

Blank 1: systematic Blank 2: process

Understanding management assertions in terms of Blank 1 of 4, Blank 2 of 4 Blank 3 of 4 and presentation and Blank 4 of 4 helps the auditor focus on the different types of audit procedures needed to test the assertions. (Enter only one word per blank.)

Blank 1: transactions Blank 2: account Blank 3: balances Blank 4: disclosure

Match the example of the testing procedure to the correct type of information designation. Direct Information Indirect Information Cash confirmation from a financial institution captured or handled appropriately.

Direct Information Cash confirmation from a financial institution Indirect Information Testing a journal entry affecting the cash account to see if it was captured or handled appropriately.

Identify the three preliminary engagement activities. Establish an understanding with the client about the services to be performed Consider and audit internal controls Determine the audit engagement team requirements Evaluate the audit results and issue an audit report Ensure the independence of the audit firm and audit team Audit business processes and related accounts Complete the audit

Establish an understanding with the client about the services to be performed Determine the audit engagement team requirements Ensure the independence of the audit firm and audit team

True or false: Information asymmetry means that owners generally have more information about the financial position and results of entity operations than the managers. True False

False Reason: Managers generally have more information about the financial position and operations than absentee owners.

How many large, international accounting firms dominate the audits of large publicly traded companies, auditing over 95% of the revenue produced by all such companies in the United States? Four Five Six Eight

Four

Which of the following usually serves as the basis for evaluating management's assertions in the context of a financial statement audit? Generally Accepted Accounting Principles (GAAP) International Auditing Standards (IAS) International Financial Reporting Standards (IFRS) Generally Accepted Auditing Standards (GAAS)

Generally Accepted Accounting Principles (GAAP)

The fact that the manager generally has more information about the "true" financial position and results of operations of the entity than does the absentee owner is called Blank 1 of 2 Blank 2 of 2. (Enter only one word per blank.)

Information Asymmetry

These are implemented to ensure that the client's information system appropriately captures and records individual transactions, which are then collected into ending account balances. Rules and regulations Financial statements External controls Internal controls

Internal controls

A company's system of internal controls is put in place by: Management Internal Auditors The SEC The Board of Directors

Management The Board of Directors

True or false: Assurance services can include almost any service provided by accounting professionals that involves capturing information, improving its quality or enhancing its usefulness for decision makers. True False

True Reason: Assurance services are independent professional services that improve the quality of information, or its context, for decision makers.

Auditors are generally hired by ______ stocks and bonds. investors that are purchasing the stock exchange that will trade the company's companies that are selling

companies that are selling

CPA's add ______ to information produced and reported by management to outside parties. credibility accuracy accountability insight

credibility

The definition of assurance services focuses on __. decision making economic resources verifying the accuracy of information

decision making

Some of the most important assertions entities make to investors are implicit in the entities' ______. financial statements press releases business prospectus

financial statements

A primary role of accounting information in the relationship between managers and owners is to ______. ensure compliance with regulatory mandates provide financial information for industry comparisons ensure that managerial compensation is reasonable hold the manager accountable to the owner

hold the manager accountable to the owner

An important preliminary engagement activity is to ensure the ______ of the audit firm and audit team. objectivity reliability independence integrity

independence

The entity being audited typically hires and pays the auditor. This highlights the importance to the investing public of auditor ______. independence cost efficiency objectivity billing rates

independence objectivity

There is a(n) ______ relation between sample size and materiality, and a(n) ______ relation between sample size and desired level of assurance. inverse, inverse inverse, direct direct, direct direct, inverse

inverse, direct

If both the manager and absentee owner seek to maximize their self-interest, the manager ______ act in the best interest of the owner. will always may not always will never

may not always

Most of the auditor's work in arriving at an opinion on the financial statements consists of ______ audit evidence relating to management's assertions. obtaining and evaluating preparing and summarizing reporting on discussing

obtaining and evaluating

In order to protect against improper use of resources by managers, owners can ______. reduce manager compensation by the amount of company resources the manager is expected to consume micromanage the manager and the executive level management of the firm increase the size of the board of directors add monitoring provisions to the manager's employment contract hire additional managers

reduce manager compensation by the amount of company resources the manager is expected to consume add monitoring provisions to the manager's employment contract

Communicating results to interested users ______. is the same for all types of audits relates to the audit report varies based on the auditor's findings can be done using whatever manner the auditor and client agrees on

relates to the audit report varies based on the auditor's findings

One reason the four large, international accounting firms dominate the audits of larger companies is because they have well-known names and strong: reputations legal teams advertising balance sheets

reputations

The assessment of internal controls ______. will be in greater depth for a public company client is not required for a non-public client should be the same for all types of clients

will be in greater depth for a public company client