Auditors are required to understand the client’s industry and business but may not be experts in identifying the quantity and value of certain inventory items. For example, consider observing a physical inventory and testing inventory valuation for a client that mines rare gems. In such cases, auditors may use a specialist to assist in testing […]
The following misstatements are included in the inventory and related records of Westbox Manufacturing Company: 1. When raw material acquisitions were recorded, the improper unit price was included in the perpetual inventory master file. Therefore, the inventory valuation was misstated because the physical inventory was priced by referring to the perpetual records. 2. In taking […]
The following audit procedures are typical of those found in auditing the payroll and personnel cycle: 1. Examine owner approval of rates of pay and withholdings. 2. Examine evidence that payroll hours and wage rates are verified by an independent person. 3. Select a sample of 40 entries in the payroll journal and trace each […]
The following questions concern internal controls, and the testing of internal controls, in the inventory and warehousing cycle. Choose the best response. a. For control purposes, the quantities of materials ordered may be omitted from the copy of the purchase order that is (1) returned to the requisitioner. (2) forwarded to the receiving department. (3) […]
Following are some of the tests of controls and substantive tests of transactions procedures often performed in the payroll and personnel cycle. 1. Examine the time card for the approval of a supervisor. 2. Recompute hours on the time card and compare the total with the total hours for which the employee has been paid. […]
BUSINESS FUNCTIONS IN THE CYCLE AND RELATED DOCUMENTS AND RECORDS Describe the business functions and the related documents and records in the payroll and personnel cycle.
Ward Publishing Company—Part III (See Case 18-30 for Parts I and II) 19-28 (OBJECTIVES 19-1, 19-2, 19-5) Examine the tests of controls and substantive tests of transactions results, including the sampling application in Case 18-30 (pp. 647–648), for Ward Publishing Company. Assume that you have already reached several conclusions. 674Part 4 / APPLICATION OF THE […]
The following audit procedures are included in the audit program for the audit of the financial statements of Golden State Overnight Express: 1. Select a sample of acquisitions from the acquisitions journal and perform the following: a. Vouch the transaction to the voucher package that includes the matched receiving report, purchase order, and vendor invoice. […]
Your client, Schroeder Manufacturing Co., provided the following schedule of property, plant, and equipment for the year ended June 30, 2019. Balances have been agreed to the general ledger. As part of the audit, the in-charge has asked you to perform procedures related to testing additions to the accounts using data provided by the client. […]
You are part of the engagement team for the audit of Suzuki Manufacturing for the year ended December 31, 2019, and are responsible for auditing the acquisition cycle. Download the Excel file for the problem from the textbook website, which contains a worksheet with acquisition transactions for the year, and a second worksheet with the […]
