The schedule in Exhibit DC8€“5 was prepared by the controller of World Manufacturing Inc. for use by the independent auditors during their examination of World€™s financial statements. All procedures performed by the audit assistant were noted in the bottom €œLegend€ section, and it was initialed properly, dated and indexed, and then submitted to a senior member of the audit staff for review. Internal control was reviewed and is considered to be satisfactory.

Required:
a. What information essential to the audit of marketable securities is missing from the schedule?
b. What essential audit procedures were not noted as having been performed by the audit assistant?

Approach:
Write specific assertions based on the five general assertions, then look to the working paper for documentation of evidence related to eachone.

Dividend and Interest FACE VALUE GENERAL GENERAL LEDGER 12/31 DESCRIPTION SERIAL OF LEDGER PURCHASED SOLD IN OF SECURITY PAY AMT. ACCRUALS NO. BONDS 1/1 IN 20X2 20X2COST 12/31MARKET DATE(S) RECEIVED 12/31 BONDS % DUE 300b,d 300b,d 1,200b,d 1/15 6 09 21-7 10,000 9,400a 9,400 9,100 7/15 275 4 03 73-0 30,000 27,500a 27,500 26,220 100 9 06 16-4 5,000 4,000a 4,000 5,080 8/1 450b,d 188 Rc 5 03 082 70,000 66,000a 57,000b 66,000 Sc 10 07 07-4 100,000 100,000e 100,000 101,250 7/ 5,000b,d 5,000 106,900 100,000 57,000 66,000 140,900 141,650 7,250 5,563 a, Stocks 750b,d 750b,d 750b,d 750b,d 750b,d 800b,d 800b,d P 1,000 shs 1,044 75,00a 7,500 7,600 6/1 Common 12/1 250 U 50 shs 8,530 9,700a 9,700 9,800 2/1 Common 667 17,200 17,200 7,400 4,600 917 9 Legends and comments relative to above a Beginning balances agreed to 20X1 working papers b Traced to cash receipts c Minutes examined (purchase and sales approved by the board of directors) d Agreed to general ledger entry to income account e Confirmed by tracing to broker's advice f Totals footed g Agreed to general ledger