Following is the current asset section from the ABC, Inc. balance sheet As of December 31 ($000s) 2010 2009 2008 Cash and cash equivalents 313454 459871 396290 Accounts receivable (less allowances for doubt accounts of $24,552, $25,850 and $26,481 respectively) 762895 624910 589416 Inventories---net 991577 889679 10099
Allowance for Uncollectible Accounts : Using the Percentage of Net Sales Method and Accounts Receivable Aging Method
The general ledger account for Accounts Receivable shows a debit balance of $40,000. The Allowance for Uncollectible Accounts has a credit balance of $2,000. Net sales for the year were $250,000. In the past, 3 percent of net sales have proved uncollectible. An aging of accounts receivable results in an estimate of $9,000 of unc
Governments in the U.S. are under considerable financial strain (see for example http://www.usdebtclock.org). It has become increasingly important to not only ensure the accuracy of financial and program documents but to strategically strive to improve the financial and program performance of government agencies. One method of i
For each individual on the engagement team and on the management of YOUCPA, complete the following: 1. Determine if they are or are not independent. 2. Explain your reasoning. YOUCPA is a regional CPA firm engaged in public audit work of small- and medium-size firms in the Midwest. The YOUCPA firm has their main office i
**Please pretend you are interviewing someone who has a Senior position at a Bank. Please provide details on the results of an interview that you will conduct in person with a manager of a bank. 1) This person must hold some type of supervisory, management or leadership position within the organization that you have sel
Prepare a bank reconciliation for XYZ Company at September 30 using the following information: Balance per XYZ Company bank statement at September 30. $ 7,351.10 Outstanding checks 5,645.45 NSF checks from customers
Identify a profile for a taxpayer who is more likely than the national average to be audited by the IRS. What factors cause certain taxpayers to be audited more frequently? What actions should taxpayers and the IRS take to ensure fairness and equality? Explain.
(Knapp, W. 8e. PP. 193-195) 1 Identify audit procedures that might have detected the improper accounting treatment applied by Dollar General to the transaction with IBM. 2. Identify the accounting concepts or principles violated by Dollar General in this case. Defend each of your choices. 3. Under what circumstances, if any
Design tests of controls, substantive tests of transactions, and analytical procedures for the Cash Cycle at Apollo Shoes.
Considering that an auditor cannot express an opinion with certainty even after conducting an audit, is an audit worth the cost for the stakeholder? 100 words.
Your company's accounts payable clerk is asked to fill in for your accounts receivable clerk. Many things look unfamiliar to her, and she needs some explanations. You start by saying, "Accounts receivable is claims from monies due to the company." Continue your explanation with the following: Explain: - the classification of
You are the newly hired accountant for The Gift Shop. The owner has just received the December 31, 2008 bank statement and has asked you to prepare the monthly bank reconciliation. Write the procedure documentation for the monthly bank reconciliation process in a professional manner. It will be the desktop guide used by o
These are two separate questions, I do not understand so any help would be great! (1) Total credit sales : $2,500,000 Accounts receivable at December 31: 970,000 Bad debts written off : 66,000 a) Assume that Hamilton Company estimates its bad debts expense based on 7% of accounts receivable. What amount of bad debts ex
Draft a business letter to Apollo Shoes that addresses the following key points; assume the role of an auditor at a local firm. - Explain the auditing and other assurance services your firm offers and the benefit each has for the client - Explain your role in providing the available assurance service to clients - Desc
Discuss the audit planning and risk assessment of the case below. Also speak to the course of action required regarding the audit. Smackey Dog Foods, Inc - Scenario Summary Smackey Dog Foods, Inc. started in the kitchen of Sarah, Kim, and Jillian's family home in the suburbs of Chicago. The three sisters initially bought t
Scenario: Over five years ago, I received a phone call from the headquarters of a non-profit organization to which I have belonged for over thirty years. They advised me that they had received word from a few members of one of the local organizations in Texas that they had some concerns that there might be some financial
1) When planning the audit, the auditor must make the following important decisions except the: a. assignment of staff to perform audit tests. b. nature of tests to be performed. c. characteristics of tests to be performed d. extent of tests to be performed. e. timing of tests to be performed 2) The five management ass
Internal vs. External Auditors While internal auditors and external auditors should have complementary interests and goals, there are differences in their scope of work. For this discussion, explore the advantages and disadvantages of selecting outside independent auditors versus internal auditors for various attestation work
You are the auditor for Busy Butterfly Corporation, whose management asserts that its internal controls are effective. While performing your audit of Busy Butterfly Corporation, you reviewed the financial statements, and your only concern was with your discovery of the evidence that during the year, the company had a negative ca
Can you comment on the following two areas? 1) A revised or final acceptable level of detection risk is determined for each assertion after (1) assessing inherent risk, (2) performing analytical procedures in audit planning, (3) assessing the risk of fraud for an assertion, and (4) making a final assessment of control risk fo
Describe the process of performing an external audit in an organization implementing strategic planning for the first time.
Recall that a bank manager has developed a new system to reduce the time customers spend waiting to be served by tellers during peak business hours. The mean waiting time during peak business hours under the current system is roughly 9 to 10 minutes. The bank manager hopes that the new system will have a mean waiting time that i
Identifying and Evaluating Audit Issues: The Case of VITALOGISTICS ISSUES IN ACCOUNTING EDUCATION Vol. 22, No. 1 February 2007 pp. 79-88 Stephen Kwaku Asare and Arnold M. Wright This case invites you to identify audit issues and evaluate an audit team's judgments and decisions on a new engagement (VITALOGISTICS). You
Evaluating Risk Factors The risk of material misstatements is of concern in planning the audit of the Anthony's Orchard financial statements for the year ending December 31, 2009. Anthony's Orchard is a publicly traded firm that is on the NASDAQ. Anthony's Orchard has customers in the United States and has growing orchards in
Once a company conducts its internal audits, an outside auditor is often engaged to review and determine, with reasonable assurance, if the company has complied with the relevant standards and appropriate requirements. At the start of every audit, auditors need to begin the engagement planning process as well as properly plan th
Each year since 2007, the accounting firm of Goode and Thuro was contracted to prepare audited financial statements for Family First Farm. Each year until the current audit, the CPAs did not find any discrepancies. This year, Arthur Goode discovered quite a few discrepancies in Family First Farm's records. After some investigati
You are the audit senior on the audit of Harmony Pty Ltd, a large manufacturing company, for the year ended 30 June 20X7. It is now 25 August, 20X7 and you are reviewing the audit working papers prepared by the audit assistant, Susan Jones, and notice the following matters: (a) Susan attended the stocktake on 30 June and observ
Consider the following independent situations, all of which apply to audits of entities for the year ending 31 December 20X7: (i) Getaway Pty. Limited is a long established firm which has been operating a boutique hotel in the Blue Mountains for over 20 years. During this time, it has adopted a conservative business strategy
Use the information below to answer the following questions: A. Audit Assessment Steps: a. What is the initial audit risk? High, medium or low? b. What factors made you decide on this level? B. Audit Plan Assertions a. What would you include in the audit plan, and why? b. Would you plan a test of controls or substant
The management of Budget Inc. is conducting an internal audit and preparing the operating budget based on wages and salaries. They are requesting the following: 1. At what point does payroll reach the break- even point with the service calls (Volume)? The accounting department provided you with the following informat