Audit Review and Documentation

Within the Discussion Board area, write 500–750 words that respond to
the following questions with your thoughts, ideas, and comments. This
will be the foundation for future discussions by your classmates. Be
substantive and clear, and use examples to reinforce your ideas.

The following situations have caused you to become concerned about the quality of the upcoming external audit:

• Because of the fact that the audit will not begin until February
  after the books have been closed, the external auditors will not be
  able to confirm the accounts receivable cutoff, physically examine the
  inventory, and examine other important procedures.
• You have just
  been advised that the auditing firm has been acquired by a larger
  auditing firm, and the auditor that is coming to Bovar Company will be
  unfamiliar with Bovar Company.
• One of the acquiring auditing firm’s principal partners is related to the chief executive officer (CEO) of Bovar Company.
• Some
  areas of control that have been of concern to the auditing department
  will not be audited because of workload and timing constraints.
• Some
  of the methodology used in the accounting department to compile the
  financial statements may not comply with generally accepted accounting
  principles (GAAP).

Generally accepted auditing standards (GAAS) provides three
categories of standards and ten standards by which an audit should be
performed. You are concerned that some of the aforementioned situations
may be in violation of the GAAS standards, and you have decided to
review the GAAS standards to detect any possible violations. Complete
the following:

• List each of these standards in their correct category.
• Identify those standards that you believe may be compromised by the aforementioned situations.
• Describe specific actions that you believe should be taken to comply with the GAAS standards. (Please include references)