Business Finance Homework Help

1. Search the internet (an entity’s website or sec.gov), and find an audit report for a public entity’s audit of internal control over financial reporting. Determine whether the entity used the combined or separate format and discuss how you determined this. Specify whether the report identifies any material weaknesses, and if so, briefly discuss the nature of the issue. Include a copy of the report you use and note the page number of the report if you include the entire financial statement file.

2. Search the internet (an entity’s website or sec.gov), and find an audit report for a public entity’s audit of internal control over financial reporting that expresses an adverse opinion with respect to the effectiveness of internal control. Include a copy of the report you use and note the page number of the report if you include the entire financial statement file.

3. Audit sampling involves applying an audit procedure to less than 100 percent of the population for the purpose of evaluating some characteristic of the population. The fact that an audit involves sampling is noted in the scope paragraph of the auditor’s report, which contains the phrase “An audit includes examining, on a test basis.” When an auditor uses sampling, an element of uncertainty enters into the auditor’s conclusions.

1). Explain the auditor’s justification for accepting the uncertainties that are inherent in the sampling process.

2). Discuss the uncertainties that collectively embody the concept of audit risk.

3). Discuss the nature of sampling risk and nonsampling risk. Include the effect of sampling risk on tests of controls.