2) Parkin Corporation created Sunlight Corporation with a transfer of $800 cash. During Sunlight Corp.'s first year of operations, it generated a net loss of $150 and paid no dividends. During Sunlight Corp.'s second year of operations, it generated net income of $350 and paid dividends of $80 a) Pass Journal Entries in the Book of Parkin Corporation for two years using Equity Method. b) Prepare 'Investment in Sunlight Corporation Account' for two years and show the balance of each year in the Book of Parent Company using Equity Method.

3. If an auditor identifies an internal control weakness for an assertion, how does it affect the audit strategy? If the auditor identifies an internal control strength for an assertion, how does it affect the audit strategy?

Assume you are on an audit. What sort of evidence would be best to answer thisquestion: Is there an evacuation procedure? O Documentation C Observation O Interview

The result of an extcrnal audit of an environmental management system it is rarcly a"fail" because O Audit criteria aregenerally very easy in the realm af environmental management O Evidence of non-conformance is difficult to obtain Auditors will not complete an audit where the overall result will be negative Minor non-conformances are common

1. If an auditor does not intend to rely on internal controls in the audit, does the auditor need to obtain an understanding of internal control? Explain.

5. Four approaches to internal control documentation are discussed in this chapter.List the advantages and disadvantages of each. How would documentation assistthe auditor to identify strengths and weaknesses of an entity's system of internalcontrols?

In planning their audit, the lead auditor has determined that it is important to reduceaudit risk. What tactics can they employ? [Multi-select] Increase number of auditors on the team Increase duration of the audit Decrease detection risk Decrease inherent risk

When interviewing an-site, it is valuable to [Multi-select] Make your questioning open-ended, to allow for nuance and exploration ofknowledge C Ask pointed clear questions that have a defined yes/no answers Sample across a spectrum of employees on-site CTarget only senior people, who will have authority and management oversight

"Private standards" are [Multi-select] Developed by civil society organizations ) Aligned with World Trade Organisation expectations Based on international consensus processes Developed by industry associations

In an audit of an ISO 14001 environmental management system, the auditor findsthat the auditee has an incomplete policy. This would be [Multi-select] C Qualitativcly material to the audit C Quantitatively material to the audit A failure by the auditee in "completeness" A failure by the auditee in "accuracy"