Buds big blue manufacturing case

Buds Big Blue Manufacturing Case

This case provides an opportunity to examine numerous issues related to the audit engagement process, including audit planning, the evaluation of management representations, audit evidence and the confirmation process. A response is required whether the particular item is correct or incorrect.

Positive forms provide audit evidence only when responses are received from the recipients; non responses do not provide audit evidence about the financial statement assertions being addressed.

Negative confirmation is a written request by the external auditor sent to a party having a financial relationship with the client and asking for a reply only in the case of disagreement. Maintaining control means establishing direct communication between the intended recipient and the auditor to minimize the possibility that the results will be biased because the interception and alteration of the confirmation requests or responses.

Investigate BBB stamp on paper. A real-life situation where an auditor apparently did not maintain sufficient control over the confirmation process, was an incident inwhere Sky Scientific, Inc.

Some positive forms request the Buds big blue manufacturing case to indicate whether he or she agrees with the information stated on the request. At three of those properties she found no evidence of current or recent mining activity, no equipment, and no personnel. Negative confirmation requests may be used to reduce audit risk to an acceptable level when a the combined assessed level of inherent and control risk is low, b a large number of small balances is involved, and c the auditor has no reason to believe that the recipients of the requests are unlikely to give them consideration.

After performing any alternative procedures, the auditor should evaluate the combined evidence provided by the confirmations and the alternative procedures to determine whether sufficient evidence has been obtained about all the applicable financial statement assertions.

The auditor should consider performing other substantive procedures to supplement the use of negative confirmations. Thus, the use of blank confirmation requests may provide a greater degree of assurance about the information confirmed.

A positive confirmation can be sent to customers to verify account balances. The negative form requests the recipient to respond only if he or she disagrees with the information stated on the request.

During the performance of confirmation procedures, the auditor should maintain control over the confirmation requests and responses. The roles and responsibilities of the concurring auditor and an outside specialist are also discussed.

An SEC investigation into those financial statements led to charges being filed against both the company and its auditors. The possibility that results will be biased based on interception and alteration Buds big blue manufacturing case the confirmation requests and responses, is a prospect of what can go wrong if the auditor does not maintain control over the confirmation process.

Other positive forms, referred to as blank forms, do not state the amount or other information on the confirmation request, but request the recipient to fill in the balance or furnish other information.

Confirmations obtained electronically can be considered to be reliable audit evidence if the auditor is satisfied that a the electronic confirmation process is secure and properly controlled, b the information obtained is a direct communication in response to a request, and c the information is obtained from a third party who is the intended respondent.

In the SEC charged several members of Sky management with fraudulent accounting practices and for filing false and misleading financial statements with the Commission. If no, describe additional procedures you believe should be performed. Barry Scutillo and Mark Jensen were charged with engaging in improper professional conduct in that they intentionally, knowingly and recklessly violated the applicable professional standards when auditing a public company.

At another mine she found equipment and personnel but no tailings that might indicate that recent operations had existed.

If the combined evidence provided by the confirmations, alternative procedures, and other procedures is not sufficient, the auditor should request additional confirmations or extend other tests, such as tests of details or analytical procedures.

Positive confirmation is a written or oral request by the auditor of a party having financial dealings with the client about the accuracy of an item. However, blank forms might result in lower response rates because additional effort may be required of the recipients; consequently, the auditor may have to perform more alternative procedures.

Negative confirmation requests may generate responses indicating misstatements, and are more likely to do so if the auditor sends a large number of negative confirmation requests and such misstatements are widespread.

The auditor should investigate relevant information provided on negative confirmations that have been returned to the auditor to determine the effect such information may have on the audit. Since there is a risk that recipients of a positive form of confirmation request with the information to be confirmed contained on it may sign and return the confirmation without verifying that the information is correct, blank forms may be used as one way to mitigate this risk.

They also charged American Capital Network and Robert Schlien with violations of several federal securities laws.

Confirmation is the process of obtaining and evaluating a direct communication from a third party in response to a request for information about a particular item affecting financial statement assertions.

Although returned negative confirmations may provide evidence about the financial statement assertions, unreturned negative confirmation requests rarely provide significant evidence concerning financial statement assertions other than certain aspects of the existence assertion.

In performing that evaluation, the auditor should consider a the reliability of the confirmations and alternative procedures; b the nature of any exceptions, including the implications, both quantitative and qualitative, of those exceptions; c the evidence provided by other procedures; and d whether additional evidence is needed.View Buds Big Blue from ACC at University of Phoenix.

Running head: Case Henrico Retail, Inc. Case Buds Big Blue Manufacturing Jessica Tuton ACC/ November 28, Mr. Allan%(26).


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Case 1 Satyam The engagement team failed to maintain control over the process of sending the confirmation requests to the banks. View Notes - Case Case Buds Big Blue Manufacturing [1] The four factors and auditor should consider when evaluating the results of confirmation procedures are: the reliability of the98%(60).

Buds big blue manufacturing case
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