Following are 10 pairs of assertions:
Not what you're looking for?
(Inherent risk) Following are 10 pairs of assertions:
1. A. Existence or occurrence of inventory
B. Existence or occurrence of building.
2. A. Valuation or allocation of cash.
B. Valuation or allocation of deferred income taxes
3. A. Existence or occurrence of AP
B. Completeness of AP
4. A. Rights and obligations of accrued wages payable
B. Rights and obligations of liability under warranties
5. A. Presentation and disclosure of repairs and maintenance expense
B. Presentation and disclosure of telephone expense
6. A. Valuation or allocation of long-term investments
B. Valuation or allocation of land
7. A. Existence or occurrence of AR
B. Completeness of AR
8. A. Existence or occurrence of cash
B. Valuation or allocation of cash
9. A. Valuation or allocation of bad debts expense
B. Valuation or allocation of depreciation expense
10. A. Valuation or allocation of receivable due from affiliate
B. Valuation or allocation of note payable to bank
Required:
a. For each pair of assertions, indicate whether a) or b) would typically have the higher inherent risk and state why.
Purchase this Solution
Solution Summary
Following are 10 pairs of assertions:
1. A. Existence or occurrence of inventory
B. Existence or occurrence of building.
2. A. Valuation or allocation of cash.
B. Valuation or allocation of deferred income taxes
3. A. Existence or occurrence of AP
B. Completeness of AP
4. A. Rights and obligations of accrued wages payable
B. Rights and obligations of liability under warranties
5. A. Presentation and disclosure of repairs and maintenance expense
B. Presentation and disclosure of telephone expense
6. A. Valuation or allocation of long-term investments
B. Valuation or allocation of land
7. A. Existence or occurrence of AR
B. Completeness of AR
8. A. Existence or occurrence of cash
B. Valuation or allocation of cash
9. A. Valuation or allocation of bad debts expense
B. Valuation or allocation of depreciation expense
10. A. Valuation or allocation of receivable due from affiliate
B. Valuation or allocation of note payable to bank
Required:
a. For each pair of assertions, indicate whether a) or b) would typically have the higher inherent risk and state why.
Solution Preview
Following are 10 pairs of assertions:
1. A. Existence or occurrence of inventory
B. Existence or occurrence of building.
2. A. Valuation or allocation of cash.
B. Valuation or allocation of deferred income taxes
3. A. Existence or occurrence of AP
B. Completeness of AP
4. A. Rights and obligations of accrued wages payable
B. Rights and obligations of liability under warranties
5. A. Presentation and disclosure of repairs and maintenance expense
B. Presentation and disclosure of telephone expense
6. A. Valuation or allocation of long-term investments
B. Valuation or allocation of land
7. A. Existence or occurrence of AR
B. Completeness of AR
8. A. Existence or occurrence of cash
B. Valuation or allocation of cash
9. A. Valuation or allocation of bad debts expense
B. Valuation or allocation of depreciation expense
10. A. Valuation or allocation of receivable due from affiliate
B. Valuation or allocation of note payable to bank
Required:
a. For each pair of assertions, indicate whether a) or b) would typically have the higher inherent risk and state why.
Answer:
(Inherent risk) Following are 10 pairs of assertions:
1. A. Existence or occurrence of inventory
B. Existence or occurrence of building.
For existence or occurrence, our goal is to verify that the transactions existed in the current period. Inventory is always a high risk area, especially if there are weak internal controls. Inventory can ...
Purchase this Solution
Free BrainMass Quizzes
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.