50.1K

Verified Solution

Link Copied!

Part II- The following question is to be answered from the knowledge of the cases read throughout the semester as it relates to the particular standard below: During the semester, we have discussed various auditing standards. We have seen how in all the cases one or more professional standards have been neglected, misinterpreted, or just not taken into account by auditors. Accounting Standard 2305: Substantive Analytical Procedures (AS2305) - subtopic 02. describes the following: "Analytical procedures are an important part of the audit process and consist of evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data. Analytical procedures range from simple comparisons to the use of complex models involving many relationships and elements of data. A basic premise underlying the application of analytical procedures is that plausible relationships among data may reasonably be expected to exist and continue in the absence of known conditions to the contrary. Particular conditions that can cause variations in these relationships include, for example, specific unusual transactions or events, accounting changes, business changes, random fluctuations, or misstatements. Looking back at the cases we have read thus far, please provide 3 instances in which the above standard was neglected, misused, and/or not considered, please use 3 different cases as examples from the cases we have discussed in class. In your response, name the case, a brief description of the fraud, and how the auditors failed to properly perform analytical procedures over financial information that could have raised red flags over fraudulent transactions activities. II Part II-BONUS QUESTION An important audit procedure performed in all audit engagements is the search for unrecorded liabilities, please provide me with the details, step by step of how to perform a search for unrecorded liabilities procedures

Answer & Explanation Solved by verified expert

See Answer