In the audit of Seaholm Corporation (Seaholm), the auditor has collected the Aged Trial Balance (ATB)...
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In the audit of Seaholm Corporation (Seaholm), the auditor has collected the Aged Trial Balance (ATB) containing a list of customers and their corresponding amount they were owing to Seaholm at the end of the financial year under the audit (all amounts are in $). The auditor has sent confirmation letters to selected customers and the amount confirmed by each customer is shown in the Table. Balance Balance as confirmed Diference by Account Customer per ATB number (30/6/2015) customer 10111 Alan Co 500,000 500,000 11987 Chels Ltd 100,000 100,000 12678 Fictional Publisher Ltd 23,705 0 23,705 (") 26598 Brown and White Co. Ltd 2.000,000 2.000,000 30012 Crist Enterprise 620,000 620,000 44451 Meay Co. Ltd 20,000 20,000 48967 Hiace Co.Ltd 15,000 NA NA 50982 Swin Co.Ltd NA NA 51234 Melb Co, Ltd 21,295 NA NA NA 62358 Blockbuster Publisher Ltd NA NA 68123 Nature Lovers Pty Ltd 13,309 NA NA 75263 Serenity NA NA 91112 Home Press Pty Ltd NA 99882 Balarat Copany 2,000,000 2,000,000 Total 5,313,309 5,289,604 23,705 NA: confirmation letters were not sent to these customers. (") Note: I (ie. The auditor) have discussed with client and the client admitted that Fictional Publisher Ltd paid the whole amount of $23,705 before the year end, but client forgot to record the transaction. Required: (a) You are asked to review the audit findings and suggest the types of auditor's opinion in this circumstance. State action (if any) and the auditor's opinion if your auditor-in- charge has set a materiality level of 527,000 for the accounts receivable account, given that there is no other misstatement discovered? (marks) (b) Would your decision in (a) change if the set materiality was $22,000 (marks) In the audit of Seaholm Corporation (Seaholm), the auditor has collected the Aged Trial Balance (ATB) containing a list of customers and their corresponding amount they were owing to Seaholm at the end of the financial year under the audit (all amounts are in $). The auditor has sent confirmation letters to selected customers and the amount confirmed by each customer is shown in the Table. Balance Balance as confirmed Diference by Account Customer per ATB number (30/6/2015) customer 10111 Alan Co 500,000 500,000 11987 Chels Ltd 100,000 100,000 12678 Fictional Publisher Ltd 23,705 0 23,705 (") 26598 Brown and White Co. Ltd 2.000,000 2.000,000 30012 Crist Enterprise 620,000 620,000 44451 Meay Co. Ltd 20,000 20,000 48967 Hiace Co.Ltd 15,000 NA NA 50982 Swin Co.Ltd NA NA 51234 Melb Co, Ltd 21,295 NA NA NA 62358 Blockbuster Publisher Ltd NA NA 68123 Nature Lovers Pty Ltd 13,309 NA NA 75263 Serenity NA NA 91112 Home Press Pty Ltd NA 99882 Balarat Copany 2,000,000 2,000,000 Total 5,313,309 5,289,604 23,705 NA: confirmation letters were not sent to these customers. (") Note: I (ie. The auditor) have discussed with client and the client admitted that Fictional Publisher Ltd paid the whole amount of $23,705 before the year end, but client forgot to record the transaction. Required: (a) You are asked to review the audit findings and suggest the types of auditor's opinion in this circumstance. State action (if any) and the auditor's opinion if your auditor-in- charge has set a materiality level of 527,000 for the accounts receivable account, given that there is no other misstatement discovered? (marks) (b) Would your decision in (a) change if the set materiality was $22,000 (marks)
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a As per ISA 505 External confirmations if there is a difference between the information requested t... View the full answer
Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
Posted Date:
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