The following questions deal with discovering fraud in auditing year-end cash. Choose the best response. a. Which of the following cash transfers results in a misstatement of cash at December 31, 2019? BANK TRANSFER SCHEDULE Disbursements Receipt Transfer Recorded in Books Paid by Bank Recorded in Books Received by Bank (1) 12/31/19 1/4/20 12/31/19 12/31/19 […]
In an engagement to review the financial statements of a nonpublic company, SSARS require the accountant to obtain review evidence that is primarily based on inquiries and analytical procedures. The nature of the accountant’s inquiries is a matter of judgment. For example, the accountant may consider the nature and materiality of the items, likelihood of […]
As a part of your clerical tests of inventory for Martin Manufacturing, you have tested about 20 percent of the dollar items and have found the following exceptions: 1. Pricing errors: Description Quantity Price Actual Price Wood 920 board feet $ 0.32/board foot $ 0.22/board foot Metal-cutting tools 49 units 300.00 each 30.00 each Cutting […]
You are assessing internal control in the audit of the payroll and personnel cycle for Rogers Products Company, a manufacturing company specializing in assembling computer parts. Rogers employs approximately 200 hourly and 30 salaried employees in three locations. Each location has one foreman who is responsible for overseeing operations. The owner of the company lives […]
As a part of your clerical tests of inventory for Martin Manufacturing, you have tested about 20 percent of the dollar items and have found the following exceptions: 1. Pricing errors: Description Quantity Price Actual Price Wood 920 board feet $ 0.32/board foot $ 0.22/board foot Metal-cutting tools 49 units 300.00 each 30.00 each Cutting […]
List five asset accounts, three liability accounts, and five expense accounts included in the acquisition and payment cycle for a typical manufacturing company. Distinguish between a vendor’s invoice and a vendor’s statement. Which document should ideally be used as evidence in auditing acquisition transactions and which is best when verifying accounts payable balances? Why? If […]
1. Distinguish among difference estimation, ratio estimation, mean-per-unit estimation, and stratified mean-per-unit estimation. Give one example in which each can be used. 2. An essential step in difference estimation is the comparison of each computed con- fidence limit with tolerable misstatement. Why is this step so important, and what should the auditor do if one […]
