WorldCom engaged in a fraud that involved fixed assets. Assume we know the following about the fixed-asset
Question:
Beginning Balance ........... $3.8 billion
Additions ...................... .. $2.1 billion
Disposals ...................... .. $1.6 billion
Ending Balance ................... $4.9 billion
We also know that the company swapped some of its line capacity—fiber optic capacity—with other carriers such as Global Crossing and Sprint. The effect of those swaps is included. The swaps include an exchange, but only in physical assets, of the rights to use Sprint’s lines for a percentage of their capacity, e.g., lines in the Midwest. In return, WorldCom allowed (at least ostensibly) Sprint to use a portion of their line capacity in the Eastern part of the United States.
Required
Identify the specific assertions for the audit of the telecommunications equipment and line capacity account for WorldCom. Identify the evidence you would gather, or look at, in addressing each assertion. Use the format that follows:
Telecommunications and Line Capacity
WorldCom
December 2007
Detailed Assertions for
the Audit of This Account Audit Evidence to be Gathered
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Related Book For
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
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