As the partner in charge of the yearly audit for CWS, you are reviewing the audit work papers for the cash and investment accounts. Before you sign off on the audit, you need to determine that sufficient audit work was done to determine whether cash and investments are materially misstated at year-end. The balance in each account is a material amount, and if they are materially misstated, the financial statements will be materially misstated.
a. Describe the audit evidence the partner would expect to find in the work papers to evaluate whether cash and investments are materially misstated at year-end.
b. What alternatives are available to the partner if the audit evidence indicates that the account balance is materially misstated?