...Engagement Quality Review In: Business and Management Engagement Quality Review ENGAGEMENT QUALITY REVIEW Introduction Engagement quality review, also known as concurring partner review or second partner review, is not a new practice and was first mandated in 1977, but it has most recently been required by the Sarbanes-Oxley Act of 2002 for each registered public accounting firm to "provide a concurring or second partner review and approval of [each] audit report (and other related information), and concurring approval in its issuance...." It has been further clarified in the Public Company Accounting Oversight Board’s Auditing Standard No. 7 (AS No. 7), that was approved by the SEC in January 2010. Early guidance on engagement quality reviews was vague, and the practice was not standardized from firm to firm. The practice involves a second partner to review the engagement and serves as an internal check for engagement quality for the audit firm. Varying degrees of partner qualifications, involvement, responsibilities, scope, and documentation requirements existed. The first section of this paper explores the evolution of this practice in the standards and the surrounding auditing profession climate leading to the new standard, AS No. 7, adopted in 2009 by the PCAOB. In the second section, various research findings are presented and discussed. Finally, we draw conclusions on the current need for engagement quality reviews in the auditing profession based...
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...RISK ASSESSMENT AND ENGAGEMENT SELECTION MEMO The purpose of this memo is to gain an understanding of the firm structure, its accounting and auditing practice, and its system of quality control. Based on the risk factors noted, the team captain will select engagements to be reviewed to reduce peer review risk to an acceptable level. Peer review risk consists of two parts: 1. The risk (consisting of inherent risk and control risk) that an engagement will not be performed and/or reported on in conformity with applicable professional standards in all materials respects, that the reviewed firm’s system of quality control will not prevent such failure, or both. 2. The risk (detection risk) that the review team will fail to detect and report on design and/or compliance deficiencies or significant deficiencies in the reviewed firm’s system of quality control. Firm Structure (number of offices, number of partners or equivalent, description of the firm’s A&A practice, etc.) INHERENT RISK FACTORS Please discuss the inherent risks of the firm under review. The following inherent risk factors should be considered and addressed below: 1. Circumstances arising within the firm (i.e. many engagements in specialized industries) 2. Circumstances outside the firm (i.e. new professional standards, regulatory requirements, adverse economic conditions, etc.) 3. Variances that many occur during the year (ie: significant increase in the number of audits performed...
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... Public Company Accounting Oversight Board Bylaws and Rules – Standards – AS3 Auditing and Related Professional Practice Standards Auditing Standard No. 3, Audit Documentation [supersedes SAS No. 96, Audit Documentation] Introduction 1. This standard establishes general requirements for documentation the auditor should prepare and retain in connection with engagements conducted pursuant to the standards of the Public Company Accounting Oversight Board ("PCAOB"). Such engagements include an audit of financial statements, an audit of internal control over financial reporting, and a review of interim financial information. This standard does not replace specific documentation requirements of other standards of the PCAOB. Objectives of Audit Documentation 2. Audit documentation is the written record of the basis for the auditor's conclusions that provides the support for the auditor's representations, whether those representations are contained in the auditor's report or otherwise. Audit documentation also facilitates the planning, performance, and supervision of the engagement, and is the basis for the review of the quality of the work because it provides the reviewer with written documentation of the evidence supporting the auditor's significant conclusions. Among other things, audit documentation includes records of the planning and performance of the work, the procedures performed, evidence obtained, and conclusions reached by the auditor. Audit documentation also may be referred...
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...2-16- a. International Standards on Auditing are established by- the International Auditing and Assurance Standards Board b. Which of the following best describes what is meant by U.S. generally accepted auditing standards? Measures of the quality of the auditor’s performance c. The general group of U.S. generally accepted auditing standards includes a requirement that- due professional care be exercised by the auditor d. What is the general character of the three generally accepted auditing standards classified as standards of field work? The criteria of audit planning and evidence gathering 2-17- a. A CPA firm is reasonably assured of meeting its responsibility to provide services that conform with professional standards by having an appropriate system of quality control b. The nature and extent of a CPA firm’s quality control policies and procedures depend on The CPA Firm’s size, The Nature of CPA firm’s practice and Cost benefit consideration c. Which of the following are elements of a CPA firm’s quality control that should be considered in establishing its quality control policies and procedures? Human resources, monitoring and engagement performance d. One purpose of establishing quality control policies and procedures for deciding whether to accept a new client is to provide reasonable assurance that the integrity of the client is considered 2-19- a. Appropriate accounting and auditing research requires adequate technical reference...
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...CHAPTER 1 AUDITING AND THE PUBLIC ACCOUNTING PROFESSION – INTEGRITY OF FINANCIAL REPORTING |LEARNING CHECK | 1. SEVERAL COMMON ATTRIBUTES OF ACTIVITIES DEFINED AS AUDITING ARE (A) SYSTEMATIC PROCESS, (B) OBJECTIVELY OBTAINING AND EVALUATING EVIDENCE, (C) ASSERTIONS ABOUT ECONOMIC ACTIONS AND EVENTS, (D) DEGREE OF CORRESPONDENCE, (E) ESTABLISHED CRITERIA, (F) COMMUNICATING THE RESULTS, AND (G) INTERESTED USERS. 2. A financial statement audit involves obtaining and evaluating evidence about an entity's financial statements for the purpose of expressing an opinion on whether the statements are presented fairly in conformity with established criteria--usually GAAP. Thus, the nature of the auditor's report is an opinion on the fairness of the financial statement presentation. A compliance audit involves obtaining and evaluating evidence to determine whether certain financial or operating activities of an entity conform to specified conditions, rules, or regulations. A report on a compliance audit takes the form of a summary of findings or assurance regarding degree of compliance. An operational audit involves obtaining and evaluating evidence about the efficiency and effectiveness of an entity's operating activities in relation to specified objectives. Reports on such audits include an assessment of efficiency and effectiveness and recommendations for improvements. 3. Independent auditors are individual practitioners or members of public...
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...Contents Introduction 3 Aon Hewitt engagement model 4 Work 5 Opportunities 5 Quality of Life 5 Policies and Practices 6 People 6 Reward 7 Employee Engagement measure 7 Conclusion 8 References 9 Introduction In the hospitality industry, the employees play a crucial role in satisfying the customers. Top-performing managers recognize that having high-performing employees is essential for growth and survival in business (Harvard Business Review, 2013). Three out of four managers consider employee engagement as the key factor to the overall success of an organization (Harvard Business Review, 2013). Employees that are positively engaged in the company’s business have higher productivity and end up bringing more profit. It, essentially, engages the workers to perform for the best of the company (Harter, Schmidt, & Hayes, 2002). Employee engagement quickly became one of the holding pillars for Ritz-Carlton’s success. In the overall engagement ranking of groups that Gallup is researching, Ritz-Carlton is placed in the upper quartile compared to other companies (Robison, 2008). Results in employee turnover rates are also renown for the industry: 18% instead of the 158%, 136% and 129% industry averages for line, supervisor and management employees respectively (Robison, 2008). Their approach to the different segments of employee engagement is best described through the AON Hewitt Engagement Model. Aon Hewitt engagement model Aon Hewitt attributes improvements...
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...expressed regarding the financial information or the assertion to the effect that an opinion cannot be expressed”. AU 339.04 goes on to state that this “audit documentation is an essential element of audit quality” and AU 339.05 further states that “audit documentation is the record of audit procedures performed, relevant audit evidence obtained, and conclusions the auditor reached”. Thus individuals can review the audit documentation to see that the audit was performed in accordance with GAAS, they can identify the reasons for the auditor’s opinion, and they can evaluate the quality of the audit. Paragraph 8 of AU 339 provides a list of additional purposes of audit documentation: • The audit team will use audit documentation to help plan and perform the audit. It is necessary to plan the audit so that the audit team is aware of the work that needs completed and they have a better idea of how long the engagement will last. The audit team will use the audit documentation when identifying the level of risk they will accept and any high risk areas that need closer examination. The use of audit documentation to perform the audit is essential so that the audit team have an accurate picture of the company’s financial information. • Auditors who are new to the engagement can review audit documentation...
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...1012–1024 www.elsevier.com/ijns Engagement at work: A review of the literature Michelle R. Simpson * Center on Age and Community, College of Nursing, Cunningham Hall, 1921 East Hartford Avenue, University of Wisconsin-Milwaukee, Milwaukee, WI 53201-0413, United States Received 26 March 2008; received in revised form 20 May 2008; accepted 22 May 2008 Abstract Objectives: Engagement at work has emerged as a potentially important employee performance and organizational management topic, however, the definition and measurement of engagement at work, and more specifically, nurse engagement, is poorly understood. The objective of this paper is to examine the current state of knowledge about engagement at work through a review of the literature. This review highlights the four lines of engagement research and focuses on the determinants and consequences of engagement at work. Methodological issues, as identified in the current research, and recommendations for future nurse-based engagement research are provided. Design: A systematic review of the business, organizational psychology, and health sciences and health administration literature about engagement at work (1990–2007) was performed. Data sources: The electronic databases for Health Sciences and Health Administration (CINAHL, MEDLINE), Business (ABI INFORM), and Psychology (PsycINFO) were systematically searched. Review methods: Due to the limited amount of research that has examined engagement among the nursing workforce, published...
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...and Systems (10 questions) ACC400 Auditing, Chapter 1-2 Pre Quiz Name: Date: [1] Gleim #: 1.1.1 -- Source: CPA 1193 A-9 In performing an attestation engagement, a CPA typically A. B. C. D. Supplies litigation support services. Assesses control risk at a low level. Provides management consulting advice. Expresses a conclusion about an assertion. Answer (A) is incorrect. Litigation support services are consulting services. Answer (B) is incorrect. The CPA assesses control risk in an audit but not necessarily in all attest engagements. Furthermore, the assessment may not be at a low level. Answer (C) is incorrect. An attest engagement results in a conclusion about an assertion. Answer (D) is correct. When a CPA in the practice of public accounting performs an attest engagement, the engagement is subject to the Statements on Standards for Attestation Engagements (codified as AT 101 to AT 801). An attest engagement is one in which a practitioner is engaged to issue or does issue an examination, a review, or an agreed-upon procedures report on subject matter, or an assertion about the subject matter, that is the responsibility of another party. [2] Gleim #: 1.1.7 -- Source: CPA, adapted A CPA is required to comply with the provisions of Statements on Standards for Attestation Engagements (SSAE) when engaged to A. Review management’s discussion and analysis (MD&A) prepared pursuant to rules and regulations adopted by the SEC. B. Report on financial statements that the CPA generated...
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...Internal Audit Guidebook Providing a framework for understanding and delivering Grant Thornton’s Internal Audit Services in a consistent, high-quality way 2012 Internal audit guidebook 1 Contents Page Introduction 2 Common service delivery methodology 6 Determine client needs 8 Scope and arrange work 10 Plan 13 Analyze and assess 20 Report and recommend 28 Implement 32 Evaluate 33 Determine business and technology context 36 Manage engagement performance, quality and risk 38 Communicate and enable change 40 Appendix 42 Internal audit engagement checklist 43 © Grant Thornton LLP. All rights reserved. Updated August 1, 2012 Internal audit guidebook 2 Introduction What is internal audit? The Institute of Internal Auditors (IIA) defines internal auditing as: Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. (1010) An internal audit objectively assesses the management of risks that a company faces. (2100 series) The aim is to • understand the current state, • assess the current state using appropriate standards and criteria, and • develop findings and recommendations...
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...The benefits of social interactive engagement outlined in (Calder et al., 2009) are crucial to the success of online marketing and are consistently addressed throughout the journal articles. Both (Brodie, 2013) and (Kim, 2012) highlight the importance of creating the appropriate platforms to facilitate and encourage the social interactive engagements discussed in (Calder et al., 2009), while (Kozinets et al., 2010) and (Chen et al., 2011) outline how a brand can best utilise these platforms in order to maximise marketing efficiency. Although online marketing is not yet the dominant medium for marketers it is becoming increasingly significant. Brands who wish to build relationships and improve loyalty with their consumers should look to online...
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...AIPM Website Membership Engagement Project Plan AIPM Website Membership Engagement Project Plan Approvals Name, Project Role & Position Project Manager Sponsor Senior User Representative CEO & Senior Supplier Document Role Date Signature Recommender Approver Approver Reviewer Document administration Development history Version Date Description Created by 0.1 13/02/2014 First Draft – Dissemination to Project Sponsor for review John Walker 0.2 15/02/2014 Second Draft – Inclusion of Business Case David Bryant 0.3 20/02/2014 Third Draft – Update from Margie’s feedback Lee Edmondson 1.0 24/02/2014 First release, reviewed and approved John Walker Contributors The following people provided information and / or were interviewed while preparing this document: Contributor Position & organisation John Walker Project Manager David Bryant Project Sponsor Nicole Walker AIPM Membership Development Manager Linda Chiarella AIPM National Events Manager Lee Edmondson AIPM Communications Manager Margie O’Tarpey AIPM CEO & Senior Supplier Kayleen Lenzo AIPM Finance and Operations Manager Document distribution history The following describes the distribution history of the document: Version Date Distribution recipients 0.1 13/02/2014 Sponsor 0.2 15/02/2014 Project Manager 0.2 15/02/2014 AIPM CEO & Senior Supplier 0.3 ...
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...Economic dependence Self review threat – non-audit services Exemptions Management threat - non-audit services Advocacy threat – non-audit services Partners joining an audited entity Disclosure requirements Effective date 1-4 5–6 7 - 11 12 – 14 15 - 19 20 – 23 24 – 26 27 Appendix: Illustrative disclosures ES - Provisions Available for Small Entities (Revised) PREFACE APB Ethical Standards apply in the audit of financial statements. They are read in the context of the Auditing Practices Board’s Statement “The Auditing Practices Board – Scope and Authority of Pronouncements (Revised)” which sets out the application and authority of APB Ethical Standards. The terms used in APB Ethical Standards are explained in the Glossary. 2 THE AUDITING PRACTICES BOARD ES - Provisions Available for Small Entities (Revised) INTRODUCTION 1 The APB issues Ethical Standards which set out the standards that auditors are required to comply with in order to discharge their responsibilities in respect of their integrity, objectivity and independence. The Ethical Standards 1 to 5 address such matters as: • How audit firms set policies and procedures to ensure that, in relation to each audit, the audit firm and all those who are in a position to influence the conduct and outcome of an audit act with integrity, objectivity and independence; • • • • Financial, business, employment and personal relationships; Long association with the audit engagement; Fees, remuneration and...
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...Question 2 Referring to Section 550 Quality Assurance and Practice review of the MIA By-Laws (on professional ethics, conducts and practice) and ISA220 Quality Control for an Audit of Financial Statements, do you believe that the engagement leader of an audit (like David Duncan on the Enron audit) should have authority to overrule the opinions and recommendations of the accounting & auditing function? Why or why not? In our opinion, the engagement leader of an audit should not have the authority to overrule the opinions and recommendations of the accounting and auditing function. To support our judgment, we refer the case to Section 550 Quality Assurance and Practice Review of the MIA By-Laws and ISA 220 Quality Control for an Audit of Financial Statement. Section 550.1 The By-Laws states that every member in public practice has to ensure that the firm adopts and applies policies and procedures designed to maintained adherence to professional standard. Enron had been hiding its Special Purpose Entity (SPE) by not consolidating the entity into its financial statements. The SPE were used to embezzle funds and hide the firm’s debts and expenses. This caused the firm to have understated expenses and profitable financial statements. The action of creating SPE is totally against the fundamental principles of auditing in terms of integrity. The principle of integrity imposes an obligation on all professional accountants to be straightforward and honest in all professional and...
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...multiple-choice questions, select the best answer. Answer each item by giving the number of your choice. Incorrect answers will be marked as zero. Multiple-choice questions must be completed in your Assignment submission area. This portion of the assignment will be automatically graded. Do not include your answers in your Word document as they will not be graded. a. During an audit of financial statements in an economic downturn, which of the following actions would the auditor be most likely to take? 1. 2. 3. 4. Increase sample size to gather more evidence. Place greater importance on management integrity. Hire an expert to evaluate accounting estimates. Increase the assessed level of planning materiality. b. Audit quality indicators provide measures to evaluate overall audit quality. Which of the following is an audit...
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