Which do you think matters more to Fisher’s board of
directors: internal or external auditing? Why do you think so?

Which do you think matters more to Fisher’s stockholders:
internal or external auditing? Why do you think so?

2. The CEO of your company has asked you to help prepare for
the upcoming company audit. One of the items the CEO has asked you to do is
suggest a number of sources in which you could get information that would be
needed to prepare the description of internal control in the audit working papers.

Prepare a memo that you will present to the CEO in which you
do the following: Suggest the sources from which you can obtain information
that would be needed to prepare the description of internal control in the
audit working papers.

Explain what potential ethical and legal issues could be
presented if these sources are not found.

Develop solutions for those issues.

3. Depending on the results of their tests of control, the
auditors may restrict substitutive procedures.

Discuss and contrast the following concepts: the planned
assessment of control risk

the revised assessment of the risk after tests of controls
have been performed

4. It has come to the CEO’s attention that Sally, a company
salesperson, grants the rights to wholesalers to return unsold product. He asks
you to discuss the following at the next board of directors meeting: In the
system of internal control, are Sally’s actions a significant deficiency or a
material weakness?

Explain your reasoning and rationale.

5. This is the first year that you have audited Hurst &
Johnson Corporation. You discovered that the company is carrying its property,
plant, and equipment at appraisal values and determines depreciation on the
basis of these values. This is considered a very large scope-limitation, and
you have not been able to form an opinion on the financial statements taken as
a whole.

Discuss the ethical issues involved with this situation.

Explain how you should handle this situation.

Explain what type of report you should issue and why.