Certain revenue and expense accounts usually are audited in conjunction with related balance sheet accounts. List the most likely related balance sheet accounts for these revenue and expense accounts: lease revenue, franchise revenue, royalty and license revenue, amortization expense, repairs and maintenance expense, and interest expense.
Answer to relevant QuestionsHow might usual revenue transactions cause significant audit evidence and reporting problems? Why are written management representations and lawyers’ letters obtained at the final stage of the audit and dated as close as possible to the audit report date? In addition to the lawyer’s letter, what other procedures can be used to gather evidence regarding contingencies? Crankwell Inc. is preparing its annual financial statements and report to shareholders. Management wants to be sure that all of the necessary and proper disclosures are incorporated into the financial statements and the ...The controller of Kim Engineering Ltd. (KEL) sent a legal representation letter to KEL’s law firm at the request of the company’s auditors. The controller told the auditors that there are no lawsuits presently ongoing. ...
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