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Discuss the audit risk model and ascertain which sampling or non-sampling techniques you would use in order to establish your preliminary judgment about materiality. Justify your response.

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Week 8 Assignment 2 – Audit Planning and Control

OVERVIEW

It is common industry knowledge that an audit plan provides the specific guidelines auditors must follow when conducting an external audit. External public accounting firms conduct external audits to ensure outside stakeholders that the company’s financial statements are prepared in accordance with generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS).

Use the Internet to select a public company that appeals to you. You may also use the company dossier in the Nexis Uni database to find company information.

Imagine that you are a senior partner in a public accounting firm hired to complete an audit for the chosen public company.

INSTRUCTIONS

Write a 4–6 page paper in which you:

  1. Outline the critical steps inherent in planning an audit and designing an effective audit program. Based on the type of company selected, provide specific details of the actions that the company should undertake during the planning and designing of the audit program.
  2. Examine at least two performance ratios that you would use in order to determine which analytical tests to perform. Identify the accounts that you would test, and select at least three analytical procedures that you would use in your audit.
  3. Analyze the balance sheet and income statement of the company that you have selected, and outline your method for evidence collection which should include, but not be limited to, the type of evidence to collect and the manner in which you would determine the sufficiency of the evidence.
  4. Discuss the audit risk model and ascertain which sampling or non-sampling techniques you would use in order to establish your preliminary judgment about materiality. Justify your response.
  5. Assuming that the end result is an unqualified audit report, outline the primary responsibilities of the audit firm after it issues the report in question.
  6. Use the Strayer Library to locate at least two quality academic resources in this assignment. Note: Wikipedia and other similar websites do not qualify as academic resources.

This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.

The specific course learning outcome associated with this assignment is:

  • Outline the process for designing an audit program, including analytical procedures, evidence collection, and responsibilities of the audit firm.

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