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Subsequent events review of auditor responsibilities

An auditor is concerned with the balance sheet as of a particular date, such at 12/31. Sometimes events occur or become know subsequent to the balance sheet date and before the issuance of the audit report. An auditor's responsibility for subsequent events and related audit procedures is addressed in the AICPA's Codificat

Bank Reconciliation Statement

Draw up the bank reconciliation statement of P. Nolan as at 30 June in order to reconcile the bank balance in the cash book with the balance in the bank statement. See attached file for full problem description.

Audit: 40 multiple choice covering a wide range of comprehensive audit topics.

Audit questions 1 Which of the following procedures would an auditor least likely perform before the balance sheet date? a. Confirmation of accounts payable. b. Observation of merchandise inventory. c. Assessment of control risk. d. Identification of related parties. 2 An auditor traced a sample of purchase orders and

Bad Debt

Because of calamitous earthquake losses, Kipmo Company, one of your client's oldest and largest customers, suddenly and unexpectedly became bankrupt. Approximately 30% of your client's total sales have been made to Kipmo's during each of the past several years. The amount due from Kipmo-- none of which is collectible -- equals 2

Audit Risk

Your firm has been hired as an outside auditor to conduct an audit on a growing software company that is getting ready to go public. The company has been in business for approximately five years, and the Controller position has had three different people in this time period. The main shareholder tells you the first Controller le

Audit Report

The following audit report was rendered on the financial statements of the Town of Maywood: We have audited the accompanying general purpose financial statements (but not the accompanying combining and individual fund statements and supplemental statistical data) of the Town of Maywood, (State), as of June 30, 20x1, and for

Auditor Reports, Evaluations and Finalizing

What are the steps that are required for an auditor to finalize the audit? Which steps are the most crucial to the outcome of the audit? How will these steps affect the final audit decision? What other types of engagements are auditors involved in besides auditing? What are the other types of reports that auditors will issu

Related Party Transactions: An Audit Program

Please help with the following problem. Provide at least 100 words in the solution. Most business transactions result from "arm's length' dealing. When parties to a transaction are related, the objectivity expected in unrelated bargaining may be lost. Any loss of objectivity may require reporting in the financial statement

Bank Note

Allied Bank was the holder of a 3-month note dated June 18th with a discount rate of 12%. The face value was $10,000. On July 20th, Allied Bank rediscounted the note at Trusted Bank at 11%. Discuss how to calculate how much Allied Bank loaned to the maker of the note and how much Allied would receive when the note was redisco

Types of Audit Tests & Audit Risk Models

The following are 11 audit procedures taken from an audit program. 1. Foot the accounts payable trial balance and compare the total with the general ledger. 2. Examine vendors' invoices to verify the ending balance an accounts payable 3. Compare the balance in payroll tax expense with previous years. The comparison takes t

Audit risk model & its components

Helpful Information: Audit risk model: PDR = AAR/IR*CR PDR = planned detection risk AAR = acceptable audit risk IR = inherent risk CR = control risk Problem: Following are six situations that involve the audit risk model as it is used for planning audit evidence requirements in the audit inventory. Situation

Audit Processes

Please describe the relationships between audit risks, the collection of audit evidence, and internal control. Use examples in your discussion.

Subsequent Events Procedures

The period between the balance sheet date and the date of the auditor report is called the subsequent period. Audit procedures performed in this period are called the subsequent events review. The significance of the audit report date is that it is the cutoff point for an auditor's responsibility to be informed about events

Management Responsibilities and Auditors Responsibilities

See attached for the Report of Management. a. What are the purposes of the two reports and who was responsible for writing each? b. What information does the report of management provide to users of financial statements c. Explain the purpose of the audit committee as described in the fourth paragraph of management's rep

Audit: appearance or fact of lack of independence

Marie Janes encounters the following situations in doing the audit of a large auto dealership, Janes is not a partner. Situations as follows: 1. The sales manager tells her that there is a sale (at a substantial discount) on new cars that is limited to long-established customers of the dealership. Because her firm has be

Toxic Waste Disposal Audit Risk Assessment

3.46 Risk Assessment. This question consists of 15 items pertaining to an auditor's risk analysis for a company. Your task is to tell how each item affects overall audit risk?the probability of giving an unqualified audit report on materially misleading financial statements. Bond, CPA, is considering audit risk at the financi

Cost of Bank Loans: evaluating alternatives

UFSU Corporation intends to borrow $450,000 to support its short-term financing requirements during the next year. The company is evaluating its financing options at the bank where it maintains its checking account. The financing alternatives offered by the bank include the following: Alternative 1: A discount interest loa

Partial Strategic Audit - Harley Davidson

Complete the following sections of a Strategic Audit of Harley-Davidson: 1. Analysis of Strategic Factors 2. Strategic Alternatives and Recommended Strategy 3. Implementation 4. Evaluation and Control Objective: Explain the strategic management process within the global environment. Conduct various environ

Tom, an individual taxpayer, has just been audited by the IRS.

Tom, an individual taxpayer, has just been audited by the IRS and, as a result, has been assessed a substantial deficiency (which has not yet been paid) in additional income taxes. In preparing his defense, Tom advances the following possibilities: a. Although a resident of Kentucky, Tom plans to sue in a U.S. District Court in

Tax Treatment, Bad Debt, AGI

33. Sue loaned her sister Janice $10,000 three years ago. Janice has never made any payments to Sue, and Sue has never tried to collect from Janice. This year, Janice filed for bankruptcy and told Sue that she would not be able to repay any of the $10,000 loan. Determine Sue's tax treatment for the loan for the current year.

Audit of Long-Term Debt

Audit of Long-Term Debt The long-term debt working paper (indexed K-1) on attached doc. was prepared by client personnel and audited by AA, an audit assistant, during the calendar year 2006 audit of American Widgets, Inc., a continuing audit client. The engagement supervisor is thoroughly reviewing the working papers. Ove

Audit of Stockholders' Equity - Zeitlow Corporation

A CPA firm is engaged in the examination of the financial statements of Zeitlow Corporation for the year ended December 31, 2006. Zeitlow Corporation?s financial statements and records have never been audited by a CPA. The stockholders? equity section of Zeitlow Corporation?s balance sheet at December 31, 2006, follows: Stoc

Journalize the transactions

On January 1, 2006, Bettendorf Company had Accounts Receivable $56,900 and Allowance for Doubtful Accounts $4,700. Bettendorf Company prepares financial statements annually. During the year the following selected transactions occurred. Jan. 5 Sold $6,900 of merchandise to John Yockey Company, terms n/30. Feb. 2 Accepted

Segregation of auditor duties

The size of an entity can affect the components of internal control. Segregation of duties is a control activity that is important for adequate control. The following example presents a scenario where the auditor can provide assistance to the entity in establishing proper segregation of duties. TameBird Industries produces meals

Effective Rate and Bank Loans

Please help with the following problem. My company needs $300,000 to take a cash discount of 2/10, net 70. A bank will loan the money for 60 days at a total interest cost of $5,500. a. What is the effective rate on the bank loan? b. How much would it cost (as a percentage) I the company did not take the cash discount