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Bebs A. Carbaquil BSBA-MA III-A

Case 1

a.      CPA’s are requested to provide assurance about effectiveness of internal control because CPA’s are said to be independent and they have the knowledge about the Code of Ethics as their basis in doing what is right, so we presumed that the information is reliable than the information provided by the Company because their might be a tendency that they will hide all their anomalies.

b.      An assertion about the effectiveness of internal control results from applying a framework for evaluating the effectiveness of internal control. The term “subject matter information” will be used to mean the outcome of the evaluation or measurement of subject matter.

Case 3

a.      The objectives of an independent audit is to examine the Financial Statements if it is fairly presented in all material respect and if the management prepares the statements their might be a conflict of interest to the persons who use the statements.

b.      Five ways in which an independent audit may be beneficial to Lyn Cruz:

1.      She fulfills the requirements.

2.      She may now communicate the information to other interested users since all the statements have been examined by a CPA.

3.      She can have the confidence to compete to other company.

4.      Misstated account balances may be corrected.

5.      She can ask for some suggestions and opinion.

Case 5

a.      Objectivity- means that the internal audit function should disclose fully all relevant information that could reasonably be expected to influence an intended users understanding of the reports, comments and recommendation presented.

b.      1. Yes, this is materially impaired because the statements are incomplete.

2. Yes, this is materially impaired because lack of information.

3. Yes, this materially impaired because the information is misstated.

4. No, this is not materially impaired.

5. Yes, this materially impaired because of the statements are renounced.

       c.   1. Yes, because both of them are intended users so there might be a tendency that the information is materially false and misleading.

             2. Yes, because if he reported it straight or directly to the audit committee of the Board of Directors, the said department will not be materially impaired because they will take an action to detect it.

      d. “Due to misstatements of the information for the internal control this would be reported to the Vice- President to take immediate action.”