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You decide to begin your interim work by performing some analytical procedures to help develop your assessment of the risk of material misstatement at the assertion level. You begin with accounts receivable and inventory. Relevant financial information has been summarized (in millions) as follows: June 30, 2020 Sept. 30, 2019 (Qtr 2) (Qtr 3) $ 3.8 $ 2.9 $25.0 $22.0 As at Accounts receivable¹ Inventory2 Sept. 30, 2020 (Qtr 3) $ 3.6 $24.0 June 30, 2019 (Qtr 2) $ 3.9 $26.0 Sept. 30, 2020 $150.0 $90.0 Sept. 30, 2019 For the quarter ending Sales³ $163.0 Cost of sales $ 99.4 Note 1: Accounts receivable is all related to commercial clients. Note 2: Inventory balance is made up of wine, beer, and spirits. Note 3: 20% of sales are on credit. Only commercial customers are eligible to make purchases on account. Payment is due within 30 days for all customers. Use ratios to perform analytical procedures on the accounts receivable and inventory balances. For any risks identified in your analysis, recommend audit procedures to address these risks at year end. You decide to begin your interim work by performing some analytical procedures to help develop your assessment of the risk of material misstatement at the assertion level. You begin with accounts receivable and inventory. Relevant financial information has been summarized (in millions) as follows: June 30, 2020 Sept. 30, 2019 (Qtr 2) (Qtr 3) $ 3.8 $ 2.9 $25.0 $22.0 As at Accounts receivable¹ Inventory2 Sept. 30, 2020 (Qtr 3) $ 3.6 $24.0 June 30, 2019 (Qtr 2) $ 3.9 $26.0 Sept. 30, 2020 $150.0 $90.0 Sept. 30, 2019 For the quarter ending Sales³ $163.0 Cost of sales $ 99.4 Note 1: Accounts receivable is all related to commercial clients. Note 2: Inventory balance is made up of wine, beer, and spirits. Note 3: 20% of sales are on credit. Only commercial customers are eligible to make purchases on account. Payment is due within 30 days for all customers. Use ratios to perform analytical procedures on the accounts receivable and inventory balances. For any risks identified in your analysis, recommend audit procedures to address these risks at year end.
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Related Book For
Auditing Cases An Interactive Learning Approach
ISBN: 9780134421827
7th Edition
Authors: Mark S Beasley, Frank A. Buckless, Steven M. Glover, Douglas F Prawitt
Posted Date:
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