1-21 The most likely type of auditor and the type of audit for each of the examples are:
EXAMPLEa. TYPE OF AUDITOR
b. TYPE OF AUDIT
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Internal auditor or CPA
CPA
Internal auditor or CPA
Internal auditor or CPA
Internal auditor or CPA
CPA or internal auditor
GAO
CPA
GAO
GAO
IRS
IRS
Financial statements or operational
Financial statements
Compliance
Compliance
Operational
Financial statements
Operational
Financial statements
Financial statements
Compliance
Compliance
Compliance
1-22 a. Financial statement audits reduce information risk, which lowers borrowing costs. An audit also provides assurances to management about information used for decision-making purposes, and may also provide recommendations to improve efficiency or effectiveness of operations.
b. Czarnecki and Hogan likely provide tax services, accounting services, and management advisory services. They may also provide additional assurance and attestation services other than audits of financial statements.
c. Student answers will vary. They may identify new types of information that require assurance, such as environmental or corporate responsibility reporting. Students may also identify opportunities for consulting or management advisory services, such as assistance with the adoption of International Financial Reporting Standards.
1-23 a. Assurance related to financial statements are the most likely forms of assurance that are likely to be provided only by public accounting firms. Examples include audits of historical financial statements, reviews of historical financial statements, audits of internal control over financial reporting, and compliance auditing such as that required by the Single Audit Act and OMB Circular A-133 (although these audits may also be provided by government auditors).
1-23 (continued)
b. There are many types of information that are assured by providers other than public accounting firms. Some of these assurances are provided by government entities, such as food inspections, elevator inspections, and pumps at gasoline stations. Other assurances are provided by nonprofit and for-profit assurance providers, such as ISO 9000 certifications.
c. Table 1-1 on p. 11 includes some examples of assurance that may be provided by public accounting firms or other assurance providers. For example, assurance on corporate responsibility and sustainability may be provided by public accounting firms or other assurance providers. Other examples included assurance on website controls, and information such as website traffic or newspaper circulation.
1-24 a. The vision of the Global Reporting Initiative (GRI) is a sustainable global economy where organizations manage their economic, environmental, social and governance performance and impacts responsibly, and report transparently. Its mission is to make sustainability reporting standard practice by providing guidance and support to organizations.
b. According to the GRI “A sustainability report is a report published by a company or organization about the economic, environmental, and social impacts caused by its everyday activities. A sustainability report also presents the organization's values and governance model, and demonstrates the link between its strategy and its commitment to a sustainable global economy.”