Knapp Case Study Example | Topics and Well Written Essays - 250 words

Knapp - Case Study ExampleQ2 Crawford auditors should take categorical measures not to permit the client to lay hold of (on the materiality room access that are to be applied in the audit. There exists unethical clients in the world. If the employees or management discover that the materiality threshold to be applied, they can use it to manipulate the system, accounts, or records because they will be aware of what the auditors are looking for in the documents and system. Arguably, it is no feasible for the auditors to hide the set threshold information, particularly when they are dealing with physical records. In the audit process, the auditors often engage the clients to assist them with various tasks, such as pulling records. If the auditors over confide on the clients information and documents, it becomes very difficult for the auditors to detect material errors.Q3 The SFAS No. 48 Revenue Recognition When Right of Return Exists, and the image Statement No. 5 of the FASB Recogn ition Measurement in Financial Statements of Business Enterprises are the leading guidelines informing firms when they are entitled to record taxations (Knapp, 2012). Equally, revenue recognition should be based on accrual accounting in line with the GAAP. Revenue should be recognized when earned, irrespective of the cash receipt timing. modern payments, early payments, and deposits are not recognized as revenue until the revenue transpired.Q4 Auditors have the principle objective of attaining a meaningful assurance that the audited financial statements do not have material mismanagement (AU200-12) (.Knapp, 2012). When Deloitte altered the audit evidence, they implied that the conclusion that was presented by the original audit was no longer supported.Question 5 incompetence with the management team increases the probability of inherent risks within the audit. Hence, auditors have to evaluate the possibility of the