Essays (25%) 1. Auditing the inventory and account payable a. Identify some potential material misstatement that...

 

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Essays (25%) 1. Auditing the inventory and account payable a. Identify some potential material misstatement that could occur on client financial statement related to inventory and account payable! (5%) b. Identify some audit procedure to detect that misstatement in point a above (5%) 2. Cash is account that has high inherent risk a. Mention some reason why cash is considered as high inherent risk to be misappropriated! (5%) b. Explain cash misappropriation in lapping and kiting scheme! (5%) 3. Auditing the revenue cycle In revenue cycle, auditor should do test of details of balance to account receivable to make sure the existence of balance. One of the audit procedure used is confirmation. Explain and provide example the different between positive and negative confirmation! (5%) Cases (75%) 4. Auditing Long-Lived Asset (15%) You are an auditor in a public accounting firm. You are handling a client. Your client is Corp B, it is a plantation of pulp and paper companies with a scale of go public. Corp B has assets in the form of plantation land spread across several regions. Corp B in this current year reported rapid business growth. They need funding to fund business growth. They do funding through bank loans. The loan is collateralized by the plantation land assets mentioned above. Based on this situation, plantation land assets became crucial. As the auditor, you must ensure that the plantation land is exist, and Corp B is the owner of that land. You also need to estimate the fair value of the plantation land, to compare it with the clients' statement. a. What assertion shown in this case? Explain your reason! (5%) b. What kinds of test of details, you need to do in this case? (5%) c. Mention some audit procedure to audit this plantation land asset! (5%) Essays (25%) 1. Auditing the inventory and account payable a. Identify some potential material misstatement that could occur on client financial statement related to inventory and account payable! (5%) b. Identify some audit procedure to detect that misstatement in point a above (5%) 2. Cash is account that has high inherent risk a. Mention some reason why cash is considered as high inherent risk to be misappropriated! (5%) b. Explain cash misappropriation in lapping and kiting scheme! (5%) 3. Auditing the revenue cycle In revenue cycle, auditor should do test of details of balance to account receivable to make sure the existence of balance. One of the audit procedure used is confirmation. Explain and provide example the different between positive and negative confirmation! (5%) Cases (75%) 4. Auditing Long-Lived Asset (15%) You are an auditor in a public accounting firm. You are handling a client. Your client is Corp B, it is a plantation of pulp and paper companies with a scale of go public. Corp B has assets in the form of plantation land spread across several regions. Corp B in this current year reported rapid business growth. They need funding to fund business growth. They do funding through bank loans. The loan is collateralized by the plantation land assets mentioned above. Based on this situation, plantation land assets became crucial. As the auditor, you must ensure that the plantation land is exist, and Corp B is the owner of that land. You also need to estimate the fair value of the plantation land, to compare it with the clients' statement. a. What assertion shown in this case? Explain your reason! (5%) b. What kinds of test of details, you need to do in this case? (5%) c. Mention some audit procedure to audit this plantation land asset! (5%)

Answer rating: 100% (QA)

1 Potential Misstatement related to inventory a Inventory may be overstated to state higher profits so proper Internal Financial Controls to be in pla... View the full answer