Discussion

Please turn in a printed copy of your responses, with team member names.

Internet Exercise (12 points)

Refer to the Public Company Accounting Oversight Board’s (PCAOB’s) website at www.pcaob.org and review the Firm Inspection Reports information under “Inspections” and select the firm report issued for Grant Thornton LLP on March 29, 2012.

a. What does the inclusion of a deficiency in an inspection report mean for the audit firm under inspection? (2-3 sentences) (1 pt)

b. According to the report, Board inspections are designed to identify what? (1 pt)

c. Name 3 categories of practices, policies, and procedures that are evaluated in the PCAOB’s inspection of the firm’s quality control system (bulleted list) (2 pts)

d. How many practice offices had audits inspected by the PCAOB? (1 pt)

e. In how many audits (issuers) did the PCAOB find deficiencies? (1 pt)

f. From the list of issuers provided, identify 4 deficiencies that were cited in the PCAOB’s inspection report. (bulleted list) (4 pts)

g. In two to four sentences, summarize the firm’s response to the PCAOB’s inspection report. (2 pts)

Standards Research (1 pt each)

1. Research and cite the appropriate interim auditing standard that describes the audit procedures that may identify conditions and events indicative of a substantial doubt about the entity’s ability to continue as a going concern.

Title | Section | Paragraph |

AU | | |

2. Research and cite the appropriate auditing standard that describes how the two general approaches to audit sampling, nonstatistical and statistical, relate to the third standard of field work.

Title | Section | Paragraph |

AU | | |

3. Research and cite the appropriate auditing standard that describes the procedures performed by the auditor to obtain an understanding of the entity and its environment, including its internal control.

Title | Section | Paragraph |

AU | | |