Laurel Limited was incorporated on 1 January 2020. You have been given the following statement and been
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Revenue Less: Operating expenses Add: Other income Less: Finance costs Profit before tax Tax for the year Profit for the year Notes to the Financial Statements 1 Revenue Revenue consists of rent revenue and commission revenue 2 Operating Expenses Operating expenses include: Directors' emoluments Leasing charges Audit fees Laurel Limited Statement of Profit or Loss for the Year Ended 31 December 2020 3 Other Income Profit on sale of land and buildings 4 Finance Costs Interest on overdraft Notes 1 2 3 34 R 303 750 137 500 25 000 5 000 196 250 49 875 146 375 R 75 000 30 000 12 000 30 000 5 000 7.1 The auditor has a duty to gather evidence to support the audit opinion. Audit evidence needs to meet certain criteria. Explain what the criteria are. 7.2 Which assertions need to be tested on the statement given in the scenario? 7.3 Explain how you would go about testing revenue in the statement. Revenue Less: Operating expenses Add: Other income Less: Finance costs Profit before tax Tax for the year Profit for the year Notes to the Financial Statements 1 Revenue Revenue consists of rent revenue and commission revenue 2 Operating Expenses Operating expenses include: Directors' emoluments Leasing charges Audit fees Laurel Limited Statement of Profit or Loss for the Year Ended 31 December 2020 3 Other Income Profit on sale of land and buildings 4 Finance Costs Interest on overdraft Notes 1 2 3 34 R 303 750 137 500 25 000 5 000 196 250 49 875 146 375 R 75 000 30 000 12 000 30 000 5 000 7.1 The auditor has a duty to gather evidence to support the audit opinion. Audit evidence needs to meet certain criteria. Explain what the criteria are. 7.2 Which assertions need to be tested on the statement given in the scenario? 7.3 Explain how you would go about testing revenue in the statement.
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What are the criteria considered by the auditor in gathering audit evidence Audit procedures to obtain audit evidence can include Inspection What is i... View the full answer
Related Book For
Auditing The Art And Science Of Assurance Engagements
ISBN: 9780136692089
15th Canadian Edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan, Joanne C. Jones
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