The schedule on page 439 was prepared by the controller of World Manufacturing for use by the independent auditors during their audit of World's year-end financial statements. All procedures performed by the audit assistant were noted at the bottom "legend" section, and it was properly initialed, dated, and indexed, and then submitted to a senior member of the audit staff for review. The internal control structure is considered to be effective.

Required:

a. What information that is essential to the audit of marketable securities is missing from this schedule? 

b. What are the essential audit procedures that were not noted as having been performed by the audit assistant?

Data from page 439

Transcribed Image Text:

Description of security World Manufacturing, Inc. MARKETABLE SECURITIES Year Ended December 31, 19X1* Dividends & Interest Face Gen. Purch. Sold Gen. Corp. Yr. Serial value ledger in in bonds de % Due No. of bonds 1/1 19X1 19X1 Cost ledger 12/31 12/31 Pay market date(s) Amt. rec. Accruals 12/31 1/15 300b,d A D G Rc Sc 64950 Y1 21-7 10000 9400a 9400 9100 7/15 300b,d 275 X3 73-0 30000 27500a 27500 26220 12/1 1200b,d 100 Y8 16-4 5000 4000a 4000 5080 8/1 450b,d 188 X5 08-2 70000 66000a 5700b 66000 10 Y9 07-4 100000 106900 a,f 100000e 100000 5700 100000 101250 7/1 5000b,d 5000 66000 140900 141650 7250 5563 f f f,g f Stocks P 1,000 shs. 1044 7500a Common U 50 shs. 8530 9700a Common 17200 a,f "The year Y1 is 10 years after X1. Legends and comments relative to above b Beginning balances agreed to 19X0 work papers Traced to cash receipts c = Minutes examined (purchase and sales approved by the board of directors) Agreed to 1099 d e f Totals footed Confirmed by tracing to broker's advice g=Agreed to general ledger 3/1 750b,d 7500 7600 6/1 750b,d 9/1 750b,d 12/1 750b,d 250 9700 9800 2/1 800b,d 8/1 800b,d 667 17200 17400 4600 917 f,g