Wooden Co., a limited liability company, produces numerous electronic products which it sells to both wholesalers...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Wooden Co., a limited liability company, produces numerous electronic products which it sells to both wholesalers and retailers. The statement of financial position for the years ended 2020 and 2019 are set out below. Last year, materiality for the financial statements as a whole was set at $10,000. Non-current assets Tangible non-current assets Investments Current assets Inventory Receivables Cash at bank Cash in hand Total assets Current liabilities Trade payables Bank loan Long-term liabilities Bank loan Provision Wooden Company Statement of Financial Position As of December 31, 2020, and 2019 Instructions: 52 78 12 1 143 121 5 126 (Amounts are in thousands) Capital and reserves Share capital Reserves Total liabilities *The provision of $20,000 consists entirely of a warranty provision. 20 2 165 20 20 2 (3) 165 179 136 34 1 350 133 5 138 21 2 373 25 2 208 373 1. Explain audit risk. 2. Discuss whether the materiality level for the financial statements as a whole used in 2019 will be appropriate for this year's audit, giving reasons for your answer. 3. Review the statement of financial position given above and state the areas in which audit work should be concentrated, giving reasons in each case. Wooden Co., a limited liability company, produces numerous electronic products which it sells to both wholesalers and retailers. The statement of financial position for the years ended 2020 and 2019 are set out below. Last year, materiality for the financial statements as a whole was set at $10,000. Non-current assets Tangible non-current assets Investments Current assets Inventory Receivables Cash at bank Cash in hand Total assets Current liabilities Trade payables Bank loan Long-term liabilities Bank loan Provision Wooden Company Statement of Financial Position As of December 31, 2020, and 2019 Instructions: 52 78 12 1 143 121 5 126 (Amounts are in thousands) Capital and reserves Share capital Reserves Total liabilities *The provision of $20,000 consists entirely of a warranty provision. 20 2 165 20 20 2 (3) 165 179 136 34 1 350 133 5 138 21 2 373 25 2 208 373 1. Explain audit risk. 2. Discuss whether the materiality level for the financial statements as a whole used in 2019 will be appropriate for this year's audit, giving reasons for your answer. 3. Review the statement of financial position given above and state the areas in which audit work should be concentrated, giving reasons in each case.
Expert Answer:
Answer rating: 100% (QA)
1 Audit Risk Explanation Audit risk involves the potential that auditors may issue an inappropriate ... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these finance questions
-
The following incomplete information is provided for an investment decision. Using break-even time (BET) analysis, when will the investment be recovered? a. At the end of year 2 b. In 2.73 years c....
-
In June of 2014, Bill Madden considered expanding his micro tiles business. He planned to invest $2.0 million in 2016 to produce more and better quality plaster or metal tiles and lithographs. These...
-
The following trial balance relates to Amethyst as at 31 March 2015: The following information is relevant: 1. After the year end stock take it was discovered that goods worth $4 million, which were...
-
Both high-income and low-income employees are covered by cafeteria plans. Under such plans, all employees may select from a list of non-taxable fringe benefits or they may elect to receive cash in...
-
Joy died on November 5, 2016. Soon after Joy's death, the executor discovered the following insurance policies on Joy's life. Joy transferred ownership of policies 757 and 848 to her son in 2009. She...
-
Dominique is a manager for a regional bank. He is being relocated several states away to act as a temporary manager while a new branch is interviewing for a permanent manager. He will leave on May 1,...
-
The materiality concept is a financial statement disclosure guideline used by most businesses to help determine when a particular account balance or economic event should be separately disclosed in a...
-
The financial statements of The Hershey Company are presented in Appendix B, following the financial statements for Tootsie Roll Industries in Appendix A. Instructions (a) Based on the information...
-
Discuss the role of technology road mapping as a tool for organizations to plan for the future.
-
Kevin has met with you and Brenda. Brenda has explained his current duties as an enduring power of attorney holder. She has also provided Kevin with a copy of Norman's will and briefly explained his...
-
Let = {a,b,c,d,f}. Consider the function X: 22-R defined by X(a)= X(b) 10. X(c)= X(d) = 15, X(e) = 0 a) Determine the o-algebra generated by X (write it explicitly) b) Now consider the the a-algebra...
-
Q2: A saver goes to a bond trader on 1 January and purchases a bond of face value $100,000 with time to maturity 2 years and which pays a coupon of $10,000 on 31 December on each of the two years....
-
Suppose your factory production line has two stations linked in series. Every raw material coming into your line is processed by Station A first. Then, the product goes to Station B for finishing....
-
Definition of change management of healthcare organisation and also explain the process.
-
A firm currently uses straight line depreciation so that depreciation expense in 2008 will be the same as in 2007. Depreciation expense in 2007 was $5,000. Sales are expected to grow by 30% in 2008....
-
Joseph received an invoice for $6,000 that had payment terms of 3/15 n/30. He made a partial payment of $3,000 during the discount period. a. Calculate the amount credited. Round to the nearest cent...
-
Vector, random numbers and reverse copy. In this assignment, the student will write several C++ functions, to support a program that generates random integers, store them in a STL vector, and reverse...
-
The water in tank A is at 270 F with quality of 10% and mass 1 lbm. It is connected to a piston/cylinder holding constant pressure of 40 psia initially with 1 lbm water at 700 F. The valve is opened,...
-
An article in the financial press entitled Important Information in Annual Reports This Year noted that annual reports include a managements discussion and analysis section. What would this section...
-
I9 2015, Elbert plc had net cash provided by operating activities of 531,000, net cash used by investing activities of 963,000, and net cash provided by financing activities of 585,000. At January 1,...
-
Gross Profit Method Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May...
-
Presented below are summary financial data from the Johnson & Johnson 2015 annual report. Using the ratio definitions from Exhibit 4.6, calculate the following ratios: return on equity, return on...
-
Presented below are summary financial data from the Bristol-Myers Squibb 2015 annual report. Using the ratio definitions from Exhibit 4.6, calculate the following liquidity and solvency ratios: cash...
-
Presented below are summary financial data from The Boeing Company 2015 annual report. Using the ratio definitions from Exhibit 4.6, calculate the following ratios: return on equity, return on assets...
Study smarter with the SolutionInn App