James Wu has been assigned the audit planning for the property, plant, and equipment section for a
Question:
James Wu has been assigned the audit planning for the property, plant, and equipment section for a large manufacturing audit client. The client built a new factory during the first six months of the year; therefore, significant additions were made to its property, plant, and equipment accounts.
Required
a. When should James plan for the audit work for to be performed, given that the client’s year end is December 31 and the audit falls during the firm’s busy season? Why?
b. If James plans for the substantive testing on the asset additions to be done before year end, should James plan to perform additional audit work on asset additions at year end?
Step by Step Answer:
a The timing of substantive procedures is directly influenced by the level of control risk Typically ...View the full answer
Auditing A Practical Approach
ISBN: 978-1119566007
3rd Canadian edition
Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren
