When reviewing the summary of audit adjustments found in the audit
|
Show Recommended textbook solutionsFinancial Accounting10th EditionCharles T. Horngren, C William Thomas, Walter T. Harrison Jr. 940 solutions
 Fundamental Financial Accounting Concepts10th EditionChristopher Edmonds, Frances McNair, Mark Edmonds, Philip R. Olds, Thomas P. Edmonds Cost Accounting: A Managerial Emphasis15th EditionCharles T. Horngren, Madhav V Rajan, Srikant M. Datar 853 solutions
Financial and Managerial Accounting7th EditionBarbara Chiappetta, John J. Wild, Ken W. Shaw 2,259 solutions journal article Identifying Audit Adjustments with Attention-Directing ProceduresThe Accounting Review Vol. 64, No. 4 (Oct., 1989) , pp. 710-728 (19 pages) Published By: American Accounting Association https://www.jstor.org/stable/247857 Read and download Log in through your school or library Subscribe to JPASS Unlimited reading + 10 downloads Monthly Plan
Yearly Plan
Abstract Studies of the error-detection performance of audit procedures have found that three attention-directing procedures-client inquiry, expectations based on prior-year errors, and analytical review-signal almost half of the material errors detected. Further, the cost of performing such procedures appears to be relatively low, suggesting a positive cost/effectiveness relation. The primary purpose of the present study is to report detailed results of applying these attention-directing procedures when errors are identified. The sample consists of 186 engagements involving 368 proposed audit adjustments of a Big Eight audit firm. The results corroborate prior studies in that about half of the errors were signaled by the three attention-directing procedures and the simplest forms of these procedures (e.g., analytical reviews comparing current- and prior-year balances) identify many errors. Moreover, internal controls appear to condition the diagnosticity of audit procedures. When controls are strong, procedures involving internal accounting data are more diagnostic, while with weak controls evidence external to the accounting records signals relatively more errors. Journal Information The Accounting Review is the premier journal for publishing articles reporting the results of accounting research and explaining and illustrating related research methodology. The scope of acceptable articles embraces any research methodology and any accounting-related subject. The primary criterion for publication in The Accounting Review is the significance of the contribution an article makes to the literature. Publisher Information The American Accounting Association is the world's largest association of accounting and business educators, researchers, and interested practitioners. A worldwide organization, the AAA promotes education, research, service, and interaction between education and practice. Formed in 1916 as the American Association of University Instructors in Accounting, the association began publishing the first of its ten journals, The Accounting Review, in 1925. Ten years later, in 1935, the association changed its name to become the American Accounting Association. The AAA now extends far beyond accounting, with 14 Sections addressing such issues as Information Systems, Artificial Intelligence/Expert Systems, Public Interest, Auditing, taxation (the American Taxation Association is a Section of the AAA), International Accounting, and Teaching and Curriculum. About 30% of AAA members live and work outside the United States. Rights & Usage This item is part of a JSTOR Collection. What should an audit summary include?The most critical content in an Audit Report. It includes the report's title, addressee details, opening paragraph, scope paragraph, opinion paragraph, signature, place of the signature, and date of the report. read more is the Auditor's Opinion.
What are audit adjustments?Audit adjustments are proposed corrections that outside auditors make for your company's general ledger. These corrections come from financial misstatements, errors or items discovered during auditing procedures that may require revision or reclassification to different accounts.
What is an adjustment and why is the resolution of adjustments important to audit quality?What is an Audit Adjustment? An audit adjustment is a proposed correction to the general ledger that is made by a company's outside auditors. The auditors may base the proposed correction on evidence found during their audit procedures, or they may want to reclassify amounts into different accounts.
How do you review an audit report?Read the Auditor's Report in This Order. Auditor's Opinion. First, look at the auditor's opinion about the fair presentation of the financial statements. ... . Notes to Financial Statements (aka Footnotes) Next, read the Notes to Financial Statements section. ... . Financial Statements. ... . Looking Ahead.. |
