Derek Smith, CPA has gathered the following information during the audit of Green Acres Fertilizer, Inc....

    

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Derek Smith, CPA has gathered the following information during the audit of Green Acres Fertilizer, Inc. In column B, select one relevant management assertion for each item by clicking in the associated cell and selecting from the option list provided. In column C, select the audit procedure(s) most likely to be performed by Derek to test that assertion by clicking in the associated cell and selecting from the option list provided. Up to three procedures can be selected. Not all procedures will be used and not all scenarios will have three procedures selected. After reviewing the balance sheet and corresponding documentation, Derek found that the inventory balance has increased significantly over the prior year. Valuation, Allocation, and Accuracy Derek is concerned that the allowance for uncollectible accounts, as a percentage of accounts receivable, has decreased, even though sales increased drastically over the prior year. Click to select When reviewing the accounts receivable subsidiary ledger, Derek found evidence that accounts had been sold to a factoring agency, but not removed from the books. 11 In reviewing documentation, Derek came across information that led him to believe that a lawsuit filed against the 12 company may result in a settlement owed by the company to the plaintiffs. 13 14 When Derek was reviewing the last quarter's revenues, he noticed a significant upswing in sales towards the end of 15 December. The upswing did not appear to exist in the prior 16 year. 17 When reviewing the working capital of the company, Derek noticed an increase in the company's current ratio due to a Click to select 18 significant decrease in current liabilities. Current assets 19 remained essentially unchanged from the prior year. Select an option below Completeness Cutoff Valuation, Allocation, and Accuracy O Existence and Occurrence Rights and Obligations O Understandability and Classification Derek Smith, CPA has gathered the following information during the audit of Green Acres Fertilizer, Inc. In column B, select one relevant management assertion for each item by clicking in the associated cell and selecting from the option list provided. In column C, select the audit procedure(s) most likely to be performed by Derek to test that assertion by clicking in the associated cell and selecting from the option list provided. Up to three procedures can be selected. Not all procedures will be used and not all scenarios will have three procedures selected. After reviewing the balance sheet and corresponding documentation, Derek found that the inventory balance has increased significantly over the prior year. Valuation, Allocation, and Accuracy Derek is concerned that the allowance for uncollectible accounts, as a percentage of accounts receivable, has decreased, even though sales increased drastically over the prior year. Click to select When reviewing the accounts receivable subsidiary ledger, Derek found evidence that accounts had been sold to a factoring agency, but not removed from the books. 11 In reviewing documentation, Derek came across information that led him to believe that a lawsuit filed against the 12 company may result in a settlement owed by the company to the plaintiffs. 13 14 When Derek was reviewing the last quarter's revenues, he noticed a significant upswing in sales towards the end of 15 December. The upswing did not appear to exist in the prior 16 year. 17 When reviewing the working capital of the company, Derek noticed an increase in the company's current ratio due to a Click to select 18 significant decrease in current liabilities. Current assets 19 remained essentially unchanged from the prior year. Select an option below Completeness Cutoff Valuation, Allocation, and Accuracy O Existence and Occurrence Rights and Obligations O Understandability and Classification

Answer rating: 100% (QA)

answer 1 Completeness Derek will check whether the inventory balance has increased significantly over the prior year by reviewing the balance sheet an... View the full answer