You are performing the audit of the JZ Limited (JZ) financial statements for its year ended September
Question:
Before correcting this error, JZ’s draft financial statements show sales revenues of $3,200,000 and accounts receivable, net of allowance for bad debts, of $450,000.
Required:
a. Explain how the accounts in the JZ financial statements will be affected by this error.
b. Explain the assertion that has been violated by this error.
c. Give one example of an audit procedure that would have discovered this error.
d. What is the impact of this error on JZ’s accounts receivable turnover?
e. Would you consider this error to be material? Justify your response. Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For
Auditing An International Approach
ISBN: 978-0071051415
6th edition
Authors: Wally J. Smieliauskas, Kathryn Bewley
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