As the partner in charge of the yearly audit for Custom Manufacturing, you are reviewing the audit
Question:
As the partner in charge of the yearly audit for Custom Manufacturing, you are reviewing the audit work papers for the Long-Term Debt and Owners' Equity accounts. Before you sign off on the audit, you need to determine that sufficient appropriate audit evidence was gathered to determine whether these two accounts are materially misstated at year end. The balance in each account is material, and if either are materially misstated, the financial statements will be materially misstated.
a. Describe the audit evidence you would expect to find in the work papers to determine whether Long-Term Debt and Owners' Equity accounts are materially misstated at year-end.
b. How will you know that the risk of fraud was considered in the audit of this process?
c. What alternatives are available to you if the audit evidence indicates that the account balance is materially misstated?
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Auditing and Assurance Services An Applied Approach
ISBN: 978-0073404004
1st edition
Authors: Iris Stuart