Indicate Whether You Agree or Disagree with the Following Statements

question 46

Essay

Indicate whether you agree or disagree with the following statements and explain your reasoning.
a) Paula Faconi has just completed a risk assessment and has identified key risk factors at Darwin Industries. When asked by one of her staff members "What's next?", she replies: "Now that we have identified the risks, its time to perform some planning in order to obtain sufficient appropriate audit evidence."
b) Roni Khali was assigned to the Inglis Glass Company audit. She was ensuring that when recognizing revenues, all transactions and events that should have been recorded have been recorded. She was testing the occurrence assertion.
c) Harvey Jarvis, the group partner was reviewing the work of Jacob Barnes on the Bazzle Gold account. Jacob asked Harvey for an explanation on how audit risk would affect his work. Harvey answered: "Audit risk affects the quantity and quality of evidence gathering."
d) Benoit Chausson, CPA made the following true statement: "The appropriateness of audit evidence refers to its relevance and reliability." He then added:

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Definitions:

100-Percent-Reserve Banking

A banking system where banks are required to keep the full amount of each depositor's funds in reserve, meaning they cannot lend out any of the money deposited.

Fractional Reserve Economy

An economic system where banks hold a portion of customers' deposits in reserve and lend out the remainder, thus creating money.

Required Reserve Ratio

The minimum fraction of deposits banks are required by law to keep as reserves, either in their vaults or on deposit at a central bank.

Term Auction Facility

A monetary policy tool used by the Federal Reserve to provide short-term loans to banks, aiming to improve liquidity and stability in financial markets.