You are a CPA engaged in an audit of the financial statements of Pate Corporation for the
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Required:
a. Prepare the detailed audit plan for the examination of the three accounts composing the stockholders’ equity section of Pate Corporation’s balance sheet. Organize the audit plan under broad financial statement assertions. (Do not include in the audit plan the audit of the results of the current- year operations.)
b. After every other figure on the balance sheet has been audited, it might appear that the retained earnings figure is a balancing figure and requires no further audit work. Why do auditors audit retained earnings as they do the other figures on the balance sheet? Discuss.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
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