Assume you are a staff associate with GKN Associates assigned to the Mystery, Inc. engagement. John Cole, the senior associate on the job, has asked for your assistance in performing journal entry testwork and data analyses for Mystery, Inc.'s 20x3 fiscal year.

While the GKN Associates data analytics team will prepare the Mystery, Inc. journal entry data using computer-assisted audit techniques (CAATs), John specifically wants you to take the lead in identifying journal entries that may be high risk.

Using the "Mystery, Inc. Journal Entry Report" Identify 9 different journal entry tests that you believe the audit team should examine in more detail. For each response: a) name the specific test; b) explain why you believe the test may indicate something suspicious and/or unusual (i.e., why is it a fraud risk); c) try to provide a rational scenario that may explain why the journal entries might actually be part of routine business activity.

What audit evidence would help you ascertain whether your selected journal entries were valid business transactions (or possibly fraudulent journal entries)?

Answer rating: 100% (QA)

As a staff associate with GKN Associates I have been assigned to assist in the journal entry test work and data analyses for Mystery Incs 20x3 fiscal year Based on the Mystery Inc Journal Entry Report ... View the full answer