In a probability-proportional-to-size sample with a sampling interval of $20,000, an auditor discovered that a selected account receivable with a recorded amount of $10,000 had an audit amount of $2,000. Calculate the projected misstatement for this one item.
Answer to relevant QuestionsGive two reasons audit work on cash is likely to be more extensive than might appear to be justified by the relative amount of the balance sheet figure for cash.Prepare an example of lapping of cash receipts, showing actual transactions and the cash receipts journal entries.Salvador Corporation made an investment in Letter.com, Inc., in exchange for 100,000 options to purchase Letter.com’s stock at $20 per share. Since the stock options are not marketable, Salvador’s management has this ...In the audit of a client with a fiscal year ending December 31, the CPAs obtain a January 10 bank statement directly from the bank. Explain how this cutoff bank statement will be used:a. In the review of the December 31 bank ...Items 1 through 6 represent the items that an auditor ordinarily would find on a client-prepared bank reconciliation. The accompanying List of Auditing Procedures represents substantive auditing procedures. For each item, ...
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