You have already learned that when preparing financial statements, management makes assertions about each account and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You have already learned that when preparing financial statements, management makes assertions about each account and the relate disclosures in the notes. Auditors then gather sufficient appropriate evidence to evaluate management's assertions. Listed below are different types of potential misstatements that could occur. Match the relevant assertion with each item. The assertions may be used once, more than once, or not at all. 1. The accounts payable balance might include amounts owed to fictitious vendors. Occurrence 2. Payroll expense that was incurred but not paid at the end of the year has not been accrued. Completeness 3. Accounts receivable has not been adjusted for potential bad debts. 4. 5. A note disclosure is missing about the client's available line of credit from a financial institution. Repairs and maintenance expense is recorded as depreciation expense. Accuracy, valuation and allocation Completeness Classification 6. Inventory has been received by the client, but it has not been recorded by the end of the period. 7. Interest expense may not be recorded at an appropriate amount. 8. 9. 10. Cutoff Accuracy The note about the client's defined benefit plan is not expressed clearly. Sales transactions have been recorded, but there has been no transfer of goods to customers. The gain on sale of a piece of equipment is recorded as sales revenue. Presentation Existence Accuracy, valuation and allocation You have already learned that when preparing financial statements, management makes assertions about each account and the relate disclosures in the notes. Auditors then gather sufficient appropriate evidence to evaluate management's assertions. Listed below are different types of potential misstatements that could occur. Match the relevant assertion with each item. The assertions may be used once, more than once, or not at all. 1. The accounts payable balance might include amounts owed to fictitious vendors. Occurrence 2. Payroll expense that was incurred but not paid at the end of the year has not been accrued. Completeness 3. Accounts receivable has not been adjusted for potential bad debts. 4. 5. A note disclosure is missing about the client's available line of credit from a financial institution. Repairs and maintenance expense is recorded as depreciation expense. Accuracy, valuation and allocation Completeness Classification 6. Inventory has been received by the client, but it has not been recorded by the end of the period. 7. Interest expense may not be recorded at an appropriate amount. 8. 9. 10. Cutoff Accuracy The note about the client's defined benefit plan is not expressed clearly. Sales transactions have been recorded, but there has been no transfer of goods to customers. The gain on sale of a piece of equipment is recorded as sales revenue. Presentation Existence Accuracy, valuation and allocation
Expert Answer:
Related Book For
Auditing A Practical Approach
ISBN: 9780730382645
4th Edition
Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton
Posted Date:
Students also viewed these accounting questions
-
Determining Food Costs Using Invoice Data: 2. Using the Sysco Invoice 02/06/23 and information provided, calculate the cost of an egg sandwich using the following ingredients and quantities outlined...
-
Crane Company has the following two temporary differences between its income tax expense and income taxes payable. Pretax financial income Excess depreciation expense on tax return Excess warranty...
-
"I'm not sure we should lay out $300,000 for that automated welding machine," said Jim Alder, president of the Superior Equipment Company. "That's a lot of money, and it would cost us $84,000 for...
-
They are considering trading their car in for a newer used vehicle so that Harry can have dependable transportation for commuting to work. The couple still owes $5,130 to the credit union for their...
-
Student cars at the author's college have ages with a mean of 7.90 years and a standard deviation of 3.67 years. Find the z scores for cars with the given ages: a. A 12-year-old Corvette b. A...
-
A ball of mass m is thrown at an angle a to the horizontal with the initial velocity vo. Find the time dependence of the magnitude of the ball's angular momentum vector relative to the point from...
-
What triggered my secondary emotions?
-
Presented below are two independent situations. (a) On April 2, Julie Keiser uses her JCPenney Company credit card to purchase merchandise from a JCPenney store for $1,500. On May 1, Keiser is billed...
-
Sincell Corporation uses customers served as its measure of activity. During April, the company budgeted for 2 2 , 3 8 0 customers, but actually served 2 4 , 3 8 0 customers. The company uses the...
-
There are two significant pieces of legislation that impact maritime security in the United States. These include the Maritime Transportation Security Act 2002 and the S.A.F.E. Port Act of 2006....
-
Summarize the Case study given Below? Case 9-1 Penner Medical Products Neil Bennett, warehouse manager at Penner Medical Products (Penner), in Rockford, Illinois, was concerned about rising costs and...
-
SQL JOINS If you are unfamiliar with the JOIN concepts, please take a moment to review the content on this page and access the links provided for a better understanding before you attempt the...
-
Sql Q2 0.5 Points Consider the following table, named icecream. ID Flavor | Color | Price 1 strawberry pink | 3.55 2 chocolate | light brown | 4.75 3 chocolate dark brown | 5.25 4 strawberry pink...
-
1. Explain why, in the traditional view of inventory, carrying costs increase as ordering cost decrease. 2. Discuss the traditional reasons for carrying inventory. 3. How safety stock is used to deal...
-
Product launch failing to comply to regulations or standards Brief product description & company descriptions Detailed explanation of situation and which regulations were in question. why did the...
-
Bella, Inc. manufactures two kinds of bags??totes and satchels. The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base. Estimated ove...
-
(a) Prove that form an orthonormal basis for R3 for the usual dot product. (b) Find the coordinates of v = (1, 1, 1)T relative to this basis. (c) Verify formula (5.5) in this particular case. 48-65...
-
Special Delivery was started on May 1 with an investment of $45,000 cash. Following are the assets and liabilities of the company on May 31, 2012, and the revenues and expenses for the month of May,...
-
The September 3, 2009, issue of BusinessWeek includes an article by Lindsey Gerdes entitled The Best Places to Launch a Career. It provides interesting information regarding the job opportunities for...
-
Presented below are selected financial statement items for Rowe Corporation for December 31, 2012. Inventory $ 55,000 Cash paid to purchase equipment $ 30,000 Cash paid to suppliers 154,000 Equipment...
Study smarter with the SolutionInn App