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

Knapp - Case work ExampleQ2 Crawford auditors should take categorical measures non to permit the client to discover the corporality threshold that argon to be applied in the audit. There exists unethical clients in the world. If the employees or management discover that the stuffity threshold to be applied, they can use it to manipulate the system, accounts, or records because they will be aw be 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 dealings with physical records. In the audit process, the auditors often engage the clients to assist them with various tasks, such as displace records. If the auditors over rely 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 Concept Statement No. 5 of the FASB Recognition Mea surement in Financial Statements of Business Enterprises are the leading guide business enterprises informing firms when they are authorize to record revenues (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. Progressive payments, early payments, and deposits are not recognized as revenue until the revenue transpired.Q4 Auditors have the principle objective of attaining a meaningful authority 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 Incompetency with the management team increases the luck of inherent risks within the audit. Hence, auditors have to evaluate the possibility of the