We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

ZZZZ Best Company, Inc: Review Report and Audit Evidence

essay
The whole doc is available only for registered users
  • Pages: 2
  • Word count: 298
  • Category: Audit

A limited time offer! Get a custom sample essay written according to your requirements urgent 3h delivery guaranteed

Order Now

Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company’s quarterly statements for the three months ended July 31, 1986. How does a review differ from an audit, particularly in terms of the level of assurance implied by the auditor’s report? Answer:

A review report does not assess the control risk of a company, which means Ernst & Whinney could have not gotten the proper risk that a material misstatement could occur within a relevant assertion. The report could have pointed out problems in the financial statements but it would not give the audit teams assurance of their accuracy. Ernst & Whinney never investigated ZZZZ Best’s internal control either, if they had done so they may have caught onto some of the fraudulent acts that were being committed. The main difference between an audit opinion and a review is an audit opinion provides assurance on the financial statements that they are accurate.

Question 2:
SAS No. 106, “Audit Evidence,” indentifies the principal “management assertions” that underlie a set of financial statements. The occurrence assertion was particularly critical for ZZZZ Best’s insurance restoration contracts. ZZZZ Best’s auditors obtained third-party confirmations to support contracts, reviewed available documentation, performed analytical procedures to evaluate the reasonableness of the revenues recorded on the contracts, and visited selected restoration sites. Comment on the limitations of the evidence that these procedures provide with regard to the management assertion of occurrence. Answer:

Obtaining third-party confirmation can be a good way to build evidence in an audit, but the evidence is built to the extent of what the third-party knows. In this case, ZZZZ Best had told third parties one thing but was doing a completely different thing than what.

Related Topics

We can write a custom essay

According to Your Specific Requirements

Order an essay
icon
300+
Materials Daily
icon
100,000+ Subjects
2000+ Topics
icon
Free Plagiarism
Checker
icon
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access
immediately?

Your Answer Is Very Helpful For Us
Thank You A Lot!

logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?

Can't find What you were Looking for?

Get access to our huge, continuously updated knowledge base

The next update will be in:
14 : 59 : 59