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Another area of concern related to independence is unpaid client fees.

Another area of concern related to independence is unpaid client fees. If an account receivable from an entity takes on the characteristics of a loan, the auditor’s independence may be impaired. Many public accounting firms adopt a policy of not completing the current audit until all of the prior year’s fees have been paid. Finally, […]

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Audit Planning and Basic Auditing Concepts

Audit Planning and Basic Auditing Concepts mes32502_ch03_067-097.indd 72 10/14/15 02:03 PM level of risk, the firm should staff the engagement with more experienced auditors. Simi- larly, if the audit involves a specialized industry (banking, insurance, and so on) or if the entity uses sophisticated IT processing or holds financial instruments, the firm must ensure that

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Net Sales Pretax Income Percent of net sales Net income

Income statement data: Net Sales Pretax Income Percent of net sales Net income Per share of common stock: Basic earnings per share Diluted earnings per share Common shares outstanding Balance sheet data: Current assets Current liabilities PPE and intangibles Total assets Noncurrent liabilities Shareholders’ investment Other data: Net working capital Capital expenditures Depreciation and amortization

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Comprehensive income

Comprehensive income Balance, December 31, 2013 Purchase of treasury stock Issuance of treasury stock Tax benefit of stock options exercised Deferred compensation expense Comprehensive income: Net income Foreign currency translation adjustments Comprehensive income Balance, December 31, 2014 Purchase of treasury stock Issuance of treasury stock Tax benefit of stock options exercised Deferred compensation expense Comprehensive

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Cash flows from (used for) operating activities:

Cash flows from (used for) operating activities: Net income Adjustments to reconcile net income to net cash flows from operating activities: Nonrecurring charge (credit) Depreciation and amortization Deferred compensation expense Deferred income taxes Loss on disposal of fixed assets Changes in assets and liabilities excluding the effects of divestitures: Receivables, net Inventory Prepaid advertising Other

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Each issue of the regular catalog offers certain basic product lines for men and women.

Each issue of the regular catalog offers certain basic product lines for men and women. The regular catalog also offers seasonal merchandise. In addition, EarthWear mails two end- of-season clearance catalogs. The Company mails its catalogs to prospective customers who are identified based on lists of magazine subscribers and lists of households meeting certain demographic

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Briefly discuss why auditors must often exercise creativity and innovation

Briefly discuss why auditors must often exercise creativity and innovation auditing financial statements. Give an example different from the one offered in the text. MULTIPLE-CHOICE QUESTIONS All applicable questions are available with Connect. LO 1-2, 1-4 1-13 An independent audit adds value to the communication of financial information because the audit a. Confirms the exact

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Why is studying auditing different from studying other accounting topics?

  Why is studying auditing different from studying other accounting topics? Why is studying auditing different from studying other accounting topics? How might understanding auditing concepts prove useful for consultants, business man- agers, and other business decision makers? LO 1-2 1-2 Discuss why there is a demand for auditing services in a free-market economy. What

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