acct612 week 11 discussion latest 2016 august

Week 11 discussion

Audit LD Step 3

Please discuss Step 3

Physical Observation of Inventory

What are the concerns that lead the auditor to physically observe inventory? Do you think observing only a sample of inventory is sufficient? Why or why not?

Attorney's Letter

As a part of completing the audit, the auditor must obtain a letter from the client's attorney. Discuss the purpose of this letter and, most importantly, the limitations of such a letter. What problems does the auditor encounter in getting an accurate and informative letter? Why?

Subsequent Events

These events take place after the end of field work. How would the auditor be aware of such events? What responsibility does he/she have if he/she is not aware of them. What if the auditor never learns about a fire that destroys the client's inventory after the end of field work, for example? Should he/she rely on the client for such information? Is there a better way to do it?

Subsequent Discoveries

What do you think about the procedures implemented by Auditing Standards in case an auditor discovers that he/she missed certain critical audit procedures after the audit report is issued? Do you think the procedures in place fully address this issue?