6. Subsequent Event (20%) Below here were subsequent event that occurs in your client. Consider that...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
6. Subsequent Event (20%) Below here were subsequent event that occurs in your client. Consider that all events were has material effect on client's financial statement. The auditor is auditing financial statement for the year ended December 31, 2018, and is completing the audit in March 15, 2019. 1) On January 10, 2019, auditor found that client made overstatement to their inventory account on 2018 ye ar-end financial statement 2) On January 14, 2019, the court ruling said that the client must pay compensation for the accident that occurred on November 20, 2018 3) On January 31, 2019, client announced that they do share split 2 for 1 for their entire common shares 4) The client purchased raw material that was received just before year-end. The purchase was recorded based on its estimated value. The invoice was not received until February 5, 2019, and the cost was substantially different than was estimated 5) On February 20, 2019 a major of client customer filled for bankrupt 6) On April 1, 2019 fire rage accident destroy client warehouse and the loss were material Questions: a. Indicate type 1 subsequent event, type 2 subsequent event, or not subsequent event. What kinds of action, client need to do? adjust, disclose, or no need to do adjust/disclose for every point form 1) to 6). Provide the reason why it should be adjust or disclose or neither. (10%) Verified by. Bambang Leo Handoko (D5271) and sent to Department/Program on July 30, 2020 Page 2 of 3 FM-BINUS-AA-FPU-78/V2RO b. What will you do, if the client refused to make appropriate adjustment or disclosure even after you inquiry with them and provide working paper and evidence as your supporting suggestion? What will you do then? (10%) 6. Subsequent Event (20%) Below here were subsequent event that occurs in your client. Consider that all events were has material effect on client's financial statement. The auditor is auditing financial statement for the year ended December 31, 2018, and is completing the audit in March 15, 2019. 1) On January 10, 2019, auditor found that client made overstatement to their inventory account on 2018 ye ar-end financial statement 2) On January 14, 2019, the court ruling said that the client must pay compensation for the accident that occurred on November 20, 2018 3) On January 31, 2019, client announced that they do share split 2 for 1 for their entire common shares 4) The client purchased raw material that was received just before year-end. The purchase was recorded based on its estimated value. The invoice was not received until February 5, 2019, and the cost was substantially different than was estimated 5) On February 20, 2019 a major of client customer filled for bankrupt 6) On April 1, 2019 fire rage accident destroy client warehouse and the loss were material Questions: a. Indicate type 1 subsequent event, type 2 subsequent event, or not subsequent event. What kinds of action, client need to do? adjust, disclose, or no need to do adjust/disclose for every point form 1) to 6). Provide the reason why it should be adjust or disclose or neither. (10%) Verified by. Bambang Leo Handoko (D5271) and sent to Department/Program on July 30, 2020 Page 2 of 3 FM-BINUS-AA-FPU-78/V2RO b. What will you do, if the client refused to make appropriate adjustment or disclosure even after you inquiry with them and provide working paper and evidence as your supporting suggestion? What will you do then? (10%)
Expert Answer:
Related Book For
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
Posted Date:
Students also viewed these accounting questions
-
The auditor is auditing financial statements for the year ended December 31, 2011, and is completing the audit in early March 2012. The following situations have come to the auditor's attention: 1....
-
The auditor is auditing financial statements for the year ended December 31, 2007 and is completing the audit in early March 2008.The following situations have come to the auditor's attention: 1. On...
-
The income statement for Delta-tec Inc. for the year ended December 31, 2016, was as follows: Delta-tec Inc. Income Statement (selected items) For the Year Ended December 31, 2016 1 Income from...
-
There are three mutually exclusive projects, where the basic information is provided below. Assume a DN alternative does not exist. Initial Cost Annual net profit Useful Life Salvage value A $25,000...
-
Analyze this scenario from the standpoint of law, and of ethics: For years, Dr. Eddingfield, a licensed physician, had been the Hurley family doctor. When Hurley became dangerously ill, he sent a...
-
Which of the following events occurring during the subsequent period is most likely to result in adjustment to the financial statements? a. A worker is injured in a plant accident. b. A large...
-
Identify and discuss the characteristics that make accounting information useful.
-
Bill OLeary could see both sides of the issue. As the general manager of the 500unit Plazamar Hotel, he knew how important it was to remember that both members of his room revenue management team now...
-
Expected dividends on a stock are 5 and current market price is 100. Given a constant and perpetual growth of 2%, what is the expected return rate?
-
The horizontal x-axis is drawn through the centroid C of the area shown, and it divides the area into two component areas A1 and A2. Determine the first moment of each component area with respect to...
-
Steam enters a turbine with a pressure of 3 MPa and a temperature of 400 o C. Saturated vapor at 100 o C exits the turbine. At steady state, the turbine produces work equal to 540 kJ per kg of steam...
-
If a garbage collector earns more than an English teacher, does that mean something is wrong with the economy? Why or why not?
-
Briefly recount the differences in median incomes among whites, blacks, Hispanics, and Asians. Briefly describe the differences in median wealth for these same groups. Draw on Tables 22.1 and 22.2 as...
-
Some economists have proposed making the tax rate progressivity depend on the wage rate rather than the income level. Thus, an individual who works twice as long as another but who receives a lower...
-
In what instance would John Rawls support greater income inequality?
-
Why did Bertrand de Juvenal argue for a high level of income inequality?
-
On June 10, Marin Company purchased $7,300 of merchandise from Cullumber Company, on account, terms 3/10, n/30. Marin pays the freight costs of $360 on June 11. Goods totaling $500 are returned to...
-
Gordon and Lisa estimate that they will need $1,875,000 in 40 years for their retirement years. If they can earn 8 percent annually on their funds, how much do they need to save annually?
-
The following is a list of controls typically implemented in the processing of sales transactions: Required a. For each control identified, briefly indicate the financial misstatement that could...
-
What evidence do vouching cash collections after the balance sheet date provide?
-
One of the criticisms of corporate America in the last decade has been that there was a failure in corporate governance. Required a. Define the term "corporate governance" and identify the major...
-
The upper curve in the boiling point diagram is called (a) The saturated vapour curve (b) The dew point curve (c) The saturated liquid curve (d) Both (a) and (b).
-
A vertical cylinder containing helium gas is filled with a piston of \(50 \mathrm{~kg}\) mass and crosssectional area of \(0.025 \mathrm{~m}^{2}\). If the atmospheric pressure outside the cylinder is...
-
The Joule-Thomson coefficient for any gas at inversion point is (a) 1 (b) 0 (c) 2 (d) 3
Study smarter with the SolutionInn App