AutoSave O OFF A B 9 . C ... 3 Cash Workpaper Home Insert Draw Page Layout Formulas Data Review View Automate . Tell me Share Comments & Cut Call 12 AA ap Wrap Text General Normal 2 Normal 3 Normal_SHEET 2 AutoSum ~ Av O [G Copy Fill Paste BIUVV OvAv Merge & Center v $ ~ % " 00 20 Conditional Fo Normal Bad Good Neutra Insert Delete Format Clear v Sort & Find & Analyze Sensitivity Format Formatting as Table Filter Select Data Open recovered workbooks? Your recent changes were saved. Do you want to continue working where you left off? Yes No F12 4 X V fx B C D E F G H I J K L M N P Q R S T U V W X Y Z AA AB Earthwear Clothiers Cash Testing A W N . December 31, 2016 Background: You are a staff auditor with Willis & Adams, CPAs. You have been assigned to the Earthwear Clothiers 2016 year end audit. Your senior has asked you to start year end field work by performing substantive testing procedures on the client's checking account. (Don't worry about the other cash accounts at this time.) Below is a summary of the instructions the senior has provided to you: 00 - Instructions: Leadsheet: Please cross reference the checking account balance you're testing on the leadsheet to the bank reconciliation provided by the client. 16-1: Please document the substantive testing procedures that you are going to perform in column G of this worksheet. Hint. See page 537 of your textbook for a recap of procedures to test bank reconciliations. 16-2a: The client has provided the December 2016 bank reconciliation for the checking account. Please document your substantive testing procedures performed in the tickmarks that have been added in the workpaper. You will perform substantive testing procedures of outstanding checks in worksheet 16-2b herein; however, all of your other testing procedures will be documented on the "Tickmarks" worksheet. Do not add any worksheets to this workpaper. 16-2b: Document your testing of the five selected outstanding checks in this worksheet. See the separate "Check copies" file for the copies of checks that you previously requested from the client for testing and the "Cutoff bank statement" file for the January 2017 cutoff bank statement. Note: Some portions of this workpaper have already been completed for you. Cover Sheet Instructions Leadsheet 16-1 16-2a 16-2b Tickmarks + Ready Ex Accessibility: Investigate " - 125%AutoSave . OFF MAP ? C ... 3 Cash Workpaper Home Insert Draw Page Layout Formulas Data Review View Automate ? Tell me Share Comments & Cut Calibri (Body) 10 AA 27 v de Wrap Text Custom Normal 2 Normal 3 Normal_SHEET X 2 AutoSum ~ Av O [ Copy Fill Paste BIUvv vAv Merge & Center v $ ~ % " 00 20 Conditional Format Normal Bad Good Neutra Insert Delete Format Sort & Find & Analyze Sensitivity Format Formatting as Table Clear v Filter Select Data Open recovered workbooks? Your recent changes were saved. Do you want to continue working where you left off? Yes No F15 4 X V fx B C D E F G H J K L M N O P Q R S T U V Earthware Clothiers Note: Leadsheet The leadsheet is an excerpt of the 12/31/2016 client's general ledger Account # Account Name 12/31/16 Re 12/31/15 Ref $ difference % difference 105001 Checking Account 3,859,114 3,624,946 234,168 5% 105002 Savings Account 46,185,047 45,345,554 839,493 2% 105003 Payroll Account - Imprest Account ,000 1,000 0% 105004 Petty Cash 5,000 6,500 (1,500 -23% Total Cash 50,050,161 48,978,000 1,072,161 2% 14 15 16 Cover Sheet Instructions Leadsheet 16-1 16-2a 16-2b Tickmarks + Ready x Accessibility: Investigate 134AutoSave . OFF MAP ? C ... 3 Cash Workpaper Home Insert Draw Page Layout Formulas Data Review View Automate Tell me Share Comments & Cut Calibri (Body) 11 A A 27 V ap Wrap Text General Normal 2 Normal 3 Normal_SHEET 2 AutoSum " Av O [ Copy Fill Paste Format OvAv Merge & Center v $ ~ % " 00 20 Conditional Fo Normal Bad Good Neutra Insert Delete Format Clear v Sort & Find & Analyze Sensitivity Formatting as Table Filter Select Data Open recovered workbooks? Your recent changes were saved. Do you want to continue working where you left off? Yes No G10 + XV fx B C D E F G H I J K L M Workpaper 16-1 Earthwear Clothiers A W N . Substantive Audit Plan 12/31/2016 Purpose: The purpose of this worksheet is to present the risks of material misstatement related to cash. For each risk, we will: 1) identify the relevant assertion, 2) identify whether the identified risk is also a fraud risk, and (3) outline substantive audit procedures that address the risk. Account Balance/ Identification of Risk of Material Misstatement Fraud Risk? Business Cycle "What Could Go Wrong") Relevant Assertion Description of Fraud Risk Substantive testing procedure Yes/No Lindsay Griswold: This merged cell will contain a description of the tests of details that you will be performing in this Cash balances recorded in the general ledger are not Management could fraudulently misstate the cash workpaper. See pages 529-534 for Cash representative of valid accounts held by the Existence Yes balances by recording fictitious bank accounts in the more detailed explanations of these procedures. company. general ledger. 10 Cash Cash balances held by the company are not recorded Completeness No N/A in the general ledger. 11 The value of vash balances recorded in the general Cash ledger are not recorded at the proper amounts as of Valuation and allocation No N/A year-end. 12 13 1 Cover Sheet Instructions Leadsheet 16-1 16-2a 16-2b Tickmarks + Ready Ex Accessibility: Investigate - 125%AutoSave . OFF MAP ? C ... 3 Cash Workpaper Home Insert Draw Page Layout Formulas Data Review View Automate . Tell me Share Comments & Cut Calibri (Body) 11 A A 27 v ap Wrap Text Custom Accent1 Accent2 Accent3 Accent4 2 AutoSum Av O [G Copy Fill Paste OvAv Merge & Center v $ ~ % " Conditional Fo Accents Accent6 Comma Comma [0] Insert Delete Format Analyze Format Formatting as Table Clear v Sort & Find & Sensitivity Filter Select Data Open recovered workbooks? Your recent changes were saved. Do you want to continue working where you left off? Yes No C13 X V fx 1508456 B C D E F G H J K L M N O P Q R S T U V W X Workpaper 16-2a W N Earthwear Clothiers Bank Reconciliation December 31, 2016 Checking Account Balance per Bank 3,705,473 (a) Balance per Books 3,864,514 Add: Add: Deposits in Transit 12/30/16 523,786 (c) 12/28/16 1,508,456 | (c) 2,032,242 Subtract: Subtract Outstanding Checks NSF Check (5,400) (e) C: 57692 357,830 (d) C: 57693 223,195 (d) C: 57694 87,915 (d) C: 57695 219,473 (d) C: 5769 428,504 (d) W: 1862 539,114 (d) C: 57697 22,570 (d) (1,878,601) Adjusted Balance 3,859,114 (b) Adjusted Balance 3,859,114 (b) Cover Sheet Instructions Leadsheet 16-1 16-2a 16-2b Tickmarks + Ready Ex Accessibility: Investigate - 132%AutoSave . OFF MAP ? C ... 3 Cash Workpaper Home Insert Draw Page Layout Formulas Data Review View Automate ? Tell me Share Comments & Cut Calibri (Body) 11 A A 27 v de Wrap Text General Normal 2 Normal 3 Normal_SHEET 2 AutoSum " Av O [ Copy Fill Paste Merge & Center v $ ~ % " 00 20 Conditional Fo Normal Bad Good Neutra Insert Delete Format Analyze Sensitivity OvAv Formatting as Table Clear v Sort & Find & Filter Select Data Format Yes No Open recovered workbooks? Your recent changes were saved. Do you want to continue working where you left off? D22 4 X V fx A B C D E F G H I J K L M N O P Q R Workpaper 16-2 Earthwear Clothiers Outstanding Check Testing 12/31/2016 Procedures: To test for understatement of subtractive items on the bank reconciliation, we used a reciprocal population of checks clearing the bank within the first 10 business days in January 2017. For each item selected, we will obtain a copy of the selected check, and examine it to determine if the item was properly included or excluded in the outstanding check listing of the reconciliation. Sample size: 5 Properly Selection # Check # Amount Check Date Date Cleared Bank Included/ 10 Excluded? 11 (f) (f) (f) (h) 12 57702 $ 134,043 1/5/17 1/10/17 Properly Excluded 13 W N H 14 UI A 21 22 23 24 25 26 27 Cover Sheet Instructions Leadsheet 16-1 16-2a 16-2b Tickmarks + Ready Ex Accessibility: Investigate - 156%AutoSave . OFF MAP ? C ... 3 Cash Workpaper Home Insert Draw Page Layout Formulas Data Review View Automate ? Tell me Share Comments & Cut Calibri (Body) 11 A A 7 v ap Wrap Text General Normal 2 Normal 3 Normal_SHEET X 2 AutoSum ~ Av O [ Copy Fill Paste OvAv Merge & Center v $ ~ % " Conditional Format Normal Bad Good Neutra Insert Delete Format Clear v Sort & Find & Analyze Sensitivity Format Formatting as Table Filter Select Data Open recovered workbooks? Your recent changes were saved. Do you want to continue working where you left off? Yes No M1 X Vfx B C D E F G H I J K L M N P Q R S T U V W X Y Z AA AB Tickmarks 2 Recalculated bank reconciliation for mathematical accuracy. Agreed balance per bank b reconciliation to general ledger (see Leadsheet) C d See testing of outstanding checks on worksheet 16-2b. Reconciling item is deemed immaterial for testing. 11 12 13 14 15 16 Reviewed information per check copy and cutoff bank statement to determine if the selected (h) check was properly included or excluded from the outstanding checks listing as of 12/31/2016 on the bank reconciliation (see 16-2a) 17 18 19 Cover Sheet Instructions Leadsheet 16-1 16-2a 16-2b Tickmarks + Ready x Accessibility: Investigate - 125%