Your firm of Certified Public Accountants has had a large number of applicants for a recent advertised vacancy. It has b
Posted: Wed Apr 27, 2022 10:49 am
Your firm of Certified Public Accountants has had a large number
of applicants for a recent advertised vacancy. It has been decided
to test applicants' knowledge of some aspects of auditing in the
initial interview. The senior partner has asked you to prepare
sample answers to the following questions that will be used by the
interview team in the initial screening interviews:
(a) What are the two (2) indicators that show a company is
facing a liquidity problem?
Explain the role of auditors in ensuring the financial viability
of the company.
(b) Justify why it is better to use positive rather than
negative circularization of debtor confirmation letter and explain
two (2) alternative audit procedures when auditors did not receive
any response from the debtors.
(c) Explain the relationship between effectiveness of internal
control of the audit client and the audit strategy used in an audit
assignment and discuss why auditors should consider the cost and
benefits when an audit procedure is performed.
(d) Explain the difference between misstatements which are
regarded as "material but not
pervasive" and "material and pervasive" and discuss their
implications on reporting the
audit findings of an audit client. Use examples to illustrate
your answers as far as possible.
(e) Explain why it is important to safeguard the "public
confidence" over the auditing function and suggest two (2) ways to
strengthen such confidence from the public.
of applicants for a recent advertised vacancy. It has been decided
to test applicants' knowledge of some aspects of auditing in the
initial interview. The senior partner has asked you to prepare
sample answers to the following questions that will be used by the
interview team in the initial screening interviews:
(a) What are the two (2) indicators that show a company is
facing a liquidity problem?
Explain the role of auditors in ensuring the financial viability
of the company.
(b) Justify why it is better to use positive rather than
negative circularization of debtor confirmation letter and explain
two (2) alternative audit procedures when auditors did not receive
any response from the debtors.
(c) Explain the relationship between effectiveness of internal
control of the audit client and the audit strategy used in an audit
assignment and discuss why auditors should consider the cost and
benefits when an audit procedure is performed.
(d) Explain the difference between misstatements which are
regarded as "material but not
pervasive" and "material and pervasive" and discuss their
implications on reporting the
audit findings of an audit client. Use examples to illustrate
your answers as far as possible.
(e) Explain why it is important to safeguard the "public
confidence" over the auditing function and suggest two (2) ways to
strengthen such confidence from the public.