1.Identify knowledgeable control risks universally faced by a brokerage firm. Identify specific control risks present by Hanauers operations. Did Hanauers studyors properly investigate these risks and inject them into consideration when planning their year-end tests?
2.Identify the examine objectives that Hanauers auditors hoped to accomplish as a result of their account confirmation procedures. In your response, consider each of the four types of account balances.
3.What special alternative audit procedures do you believe the Hanauer auditors should have employ to those accounts that the client did not want confirmed?
4.Define a material audit scope limitation in general terms. Do you agree with the SEC that Hanauers management enforce a material scope limitation on its annual audits?
5.Should an audit client be allowed to follow its engagement audit partner to another accounting firm?
Facts
J.B. Hanauer & Co. is a brokerage firm headquartered in New Jersey. During the late 1970s and too soon 1980s Stanley Goldberg supervised the annual audits of J.B. Hanauer & Co. During his career Goldberg served as an audit partner with three different public accounting firms.
When he left Touche Ross to join Eisner, Hanauers executives wanted Goldberg to continue administer their annual audits. As a result, in 1980 these executives dismissed Touche Ross and contain the Eisner firm. Despite several questions regarding the reliability of Hanauers internal controls, each year that Goldberg supervised the firms independent audit, he concluded that there were no material weaknesses in its internal control structure. One of his greatest concerns was the extensive and unusual distributor point of authority Hanauer granted to its gross revenue staff. Some tasks performed by sales staff were: they accepted and processed customers purchased orders, personally delivered customer confirmations, obtained common carrier coupon and deposited cash received from customers. One critical...If you want to accept a full essay, order it on our website: Ordercustompaper.com
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