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Auditing

 

            The first Generally Accepted Accounting Standard states the examination is to be performed by a person or persons having adequate technical training and proficiency as an auditor. Holmes, CPA, did not follow this standard as he had two accounting students as his assistants with a lack of proficiency. These tow students are not certified public accountants and do not have the experience to help with this audit.
             The second standard states in all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditors. Holmes seemed more concerned with getting the audit finished, then spending adequate time making sure it was done properly. He did not use proper standard while conducting the audit.
             Due professional care is to be exercised in the performance of the examination and the preparation of the report. Holmes also did not follow this standard. He spent only a few hours explaining to the students what they should do. The CPA rushed the two students to complete the audit improperly.
             The work of an audit should be adequately planned and assistants shall be properly supervises. First, this audit was never planned out. Second, Holmes did not supervise the two inexperienced students. They were given an assignment to complete on their won and within tow weeks present their report.
             There should be a sufficient understanding of internal control to plan the audit and to determine the nature, timing, and extent of tests to be performed. Holmes specifically told the students not to spend time reviewing the controls. Therefore, planning was not involved in this audit and test was not performed. .
             Sufficient competent evidential matter is to be obtained thru inspection, observation, inquires, and confirmations to afford a reasonable basis for an opinion regarding financial statements under examination. The two students were instructed to prove mathematical accuracy of the ledger accounts and summarize the date in the records to support Ray's financial statements.


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