Question: The controller of a new client company informs you that most of the inventories are stored in bonded public warehouses. He presents warehouse receipts to

The controller of a new client company informs you that most of the inventories are stored in bonded public warehouses. He presents warehouse receipts to account for the inventories. Will careful examination of these warehouse receipts constitute adequate verification of these inventories? Explain.

Step by Step Solution

★★★★★

3.59 Rating (170 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

No Inspection of the warehouse receipts does not const... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

336-B-A-A-A-N (1152).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

List five functional areas and their sub-functions.

The controller of a new client operating a medium-size manufacturing business complains to you that he believes the company has sustained significant losses on several occasions because certain sales...

You are the controller of a newly established technology firm that is offering a new pension plan to its employees. The plan was established on January 1, 2013, with an initial contribution by the...

You are the controller of a newly established technology firm that is offering a new pension plan to its employees. The plan was established on January 1, 2011, with an initial contribution by the...

The controller of a new client company informs you that most of the inventories are stored in bonded public warehouses. He presents warehouse receipts to account for the inventories. Will careful...

Blanchard Importing and Disbuting II1 After his first year at the Harvard Business School, Hank Hatch accepted summer employment with Blanchard Importing and Distributing, a Boston firm that dealt in...

100% 8 / 2 Allied Office Products This case is set in the business forms business in 1992 in a company which augments its "commodity" products with value-added distribution and logistics services....

Auditing 2 Complete Sales Form Farm Specialty Source Company Case Notes You are a Senior Manager in the Auditing group for Rowlands, Marcellin, and Khan LLP.You have a new client, Farm Specialty...

Section 1: Client Acceptance BACKGROUND Ocean Manufacturing, Inc. manufactures small-to medium-sized home appliances. The company's products include items like toasters, blenders, and trash...

You are a Senior Manager in the Auditing group for Rowlands, Marcellin, and Khan LLP.You have a new client, Farm Specialty Source Company (FarmSpec), and are now planning the August testing of...

You are an audit senior in the firm of Miller and King LLP and are currently reviewing the audit working papers and a draft of the audited financial statements of a new client for you, Superior Inc....

The partnership agreement of Dan, Hen, and Bai provides that profits are to be divided as follows: Bai receives a salary of $24,000, and Hen receives a salary of $18,000 for time spent in the...

Some of the most common (and most dangerous) examples of simple interest are short-term payday loans, which some lenders also call "cash advances". (This is not to be confused with a cash advance on...

One of the ways that the federal Sarbanes Oxley Act helps reduce business fraud and unethical management decisions is by requiring companies to set up confidential systems for employees to report...

Depreciation for Partial PeriodSL, SYD, and DDB Alladin Company purchased Machine #201 on May 1, 2010. The following information relating to Machine #201 was gathered at the end of May....

Holiday Warehouse distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of its customers. During the month of July, the following merchandising transactions occurred....

Terry Lawler, managing director of the Memphis Consulting Group, is examining how overhead costs behave with changes in monthly professional labor-hours billed to clients. Assume the following...

For a K + ?Cl ? ion pair, attractive and repulsive energies EA and ER, respectively, depend on the distance between the ions r, according to For these expressions, energies are expressed in electron...

Willie Lohmann travels from city to city in the conduct of his business. Every other year he buys a used . car for about $12,000. The auto dealer allows about $8000 as a trade-in allowance with the...

Did Harwell possess the intent to exchange sex for money? Can there be a legal agreement given that Officer Miller did not possess an intent to exchange sex for money?

Ling, an audit manager, is planning the audit of Modern Technologies, Inc., (MT, Inc.) a manufacturer of electronic components. This is the first year that Lings audit firm has performed the audit...

Below and on page 278 are statements of earnings and financial position for Wexler Industries. a. Use professional judgment in deciding on the preliminary judgment about materiality for earnings,...

Mark Hopper is planning the audit of the investments account for audit client Garden Supply Co. (GSC). GSC invests excess cash at the end of the summer sales season through an investment manager who...

Jazz World Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be...

Blue Water Systems is analyzing a project with the following cash flows. The cash flows, in order, are -$236,000 (initial cost), $137,400 (year 1 CF), $189,300 (year 2 CF) and -$25,000 (year 3 CF)....

The controller of Sunland Production has collected the following monthly cost data for analyzing the behavior of electricity costs. What electricity cost does the cost equation estimate for a level...