intentionally never recorded. Which of the following assertions was violated?
Q: 19. Inherent risk is the risk that internal control will fail to prevent or detect and correct the…
A: The risk that the company's internal controls will fail to prevent, detect, or correct substantial…
Q: O None of these would be considered a breach of the qualitative characteristic of faithful…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: If you become aware of a breach or violation, you should
A: Breach or violation of the terms and conditions by the employee is a commit of fraud or revealing…
Q: The separate entity assumption states that, in the absence of contrary evidence, all entities will…
A: The separate entity assumption states that the transactions conducted by a business are separate to…
Q: What items could increase the risk of material misstatement?
A: Risk of material misstatement (ROMM) is a risk that the financial statements when audited will…
Q: The susceptibility of an assertion about a class of transaction, account balance or disclosure to a…
A: Audit risk is the possibility that an auditor won't find fraud or errors while reviewing a client's…
Q: When can a check be a negotiable instrument
A: In finance in general and in the world of banking, trade and commerce in particular checks and…
Q: The risk that a client's financial statements are susceptible to material misstatements is a.…
A: SOLUTION- INHERENT RISK IS THE RISK POSED BY AN ERROR OR OMISSION IN A FINANCIAL STATEMENT DUE TO A…
Q: MUS's auditor assesses what is an acceptable misstatement
A: Dollar unit sampling (MUS) is a quantitative sampling procedure that is sometimes referred to as…
Q: What are the possible reasons for keeping incomplete records?
A: Incomplete records: It refers to a situation where an organization does not use double entry book…
Q: How can auditors ensure they are receiving authentic documentation, not forgeries?
A:
Q: Which of the following statements is NOT CORRECT relative to source documents? a. The internally…
A: Source documents are those documents which are provided as evidence that a particular transaction…
Q: It is good to assume that unusual items will be zero. True or False
A: Unusual or Infrequent Items are transactions that are unusual in nature or infrequent. The items…
Q: Which statement is incorrect? A. The systematic manner of presentation of Notes to F/S is…
A: The notes to the financial statement shall present the information about the basis and the…
Q: Which of the following statements is false about CD's
A: Certificate of Deposits or CD's is offered by banks or financial institutions. The CD's are deposits…
Q: Whare are the disadvantages of external goverment audits?
A: Government Audits generally refer to audit of performance of the Government activities with respect…
Q: describe conditions that are conducive to issuing low-quality, or even fraudulent, fi…
A: Financial reports are issued at the end of the year that shows the status of the Company.
Q: Which one of the following statements is INCORRECT?
A: Statement (2) is correct as under FIFO method, the earlier goods purchased would be comparatively…
Q: Secondary purpose of audit documentation is to provide adequate defense in case of litigation for…
A: Audit documentation, often known as working papers as well as work papers, seems to be a work…
Q: does it matter that groupon reported its weakness in internal controls as a disclosuer control under…
A: Section 302 of SOX mandates the management specifically the CEO and CFO to report the fairness of…
Q: Does the use of ghost-ticking would violate what pillar of character?
A: Making a mark that suggests you confirmed them when you didn't would be called "ghost ticking."…
Q: What are the advantages and disadvantages of an adverse audit
A: Adverse audit refers that the opinion has been provided on the financial statements that: The…
Q: What is the upper limit on misstatements? What information does it provide the auditor?
A: A Misstatement is a statement having concealed facts or misleading information regarding the facts,…
Q: prior to date of record. Which of the following statements is FALSE?
A: Statement (I) is true. This is because record date is the date on which all the shareholders…
Q: In the Framework, it is possible that an entity may not disclose relevant information. Why?
A: The <IR> Framework is the International Integrated Reporting Framework, which presides over…
Q: There is no need to perform substantive tests procedures if the control risk is determined to be…
A: Auditing means the independent checking of company operation by outsider. Auditor is a qualified and…
Q: Scope limitation results from an inability to collect sufficient appropriate evidence. * True O…
A: Scope limitation: It is a restriction on an audit that is caused by the client, issues beyond the…
Q: How do the professional audit standards differ for (a) errors, (b) frauds, (c) direct-effect…
A: Errors: Error refers to omission of amounts or misstatement or disclosure in financial statement.…
Q: Which is an error of omission
A: Accounting error is error in entering, computing, and analysis of data. This includes the recording…
Q: Why should receiving reports be prenumbered? What assertion would an auditor test using thereceiving…
A:
Q: Name the error which was made under the following circumstances:
A: The error of omission is a type of error that takes the account of results caused due inactions or…
Q: According to IFRS, the retrospective technique should not be employed if any of the following…
A: The question explains about According to IFRS, the retrospective technique should not be employed…
Q: Risk of material misstatements increases if
A: Please see the next step for the solution
Q: The likelihood that material misstatements may have entered the accounting system and notbeen…
A:
Q: Which of the following statements is false?
A: Sinc as there are multiple questions are given, so as per answering guideline we do only first one.
Q: Is the auditor’s liability affected if the third party was unknownrather than known? Explain
A:
Q: Define Illegal acts.
A:
Q: What is an uncorrected misstatement?
A: Auditing: Auditing refers to an independent examination of financial information of any…
Q: How to ensure that overstatement as well as misstatements of account balances due to redundancy and…
A: Overstatement of account balances means reporting the account balances at an amount above the actual…
Q: Can a updated check be an negotiable instrument
A: Negotiable instrument refers to the instrument which guarantee the payment of particular amount that…
Q: Which of the following statement/s are incorrect?
A: Liability: Liability: Amount of money or fund entity owns to pay outside or within the organization.…
Q: Define the term illegal acts.
A: Confidential Client Information Rule: Confidential client information rule states that the member of…
Q: Did the preparation of checks violate the auditors’ Code of Ethics?
A:
Q: Which of the following is NOT an example of a significant deficiency in internal control?
A: Statement 2,3 and 4 are examples of significant deficiency in internal control as they are…
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- Rayan Company, a CPA firm, conducted an audit for the 2020 financial statements of Tia Corporation. During the course of the audit, the auditors noticed that repairs and maintenance expenses were recorded as an addition to fixed assets to decrease expenses amount in the financial statements. Which one of the following assertions was violated? Occurrence Completeness Existence Accuracy None of the aboveYou were assigned to audit the financial statements of Swansea Corporation as at and for the year ended December 31, 2021. Your senior asked you to draft a memo on materiality and tolerable error for your client. Swansea Corporation has incurred substantial net losses due to COVID-19 pandemic. Up to 2019, it has been profitable. Which of the following is least likely to be your starting point in computing materiality? Group of answer choices Normalized net income Net loss Total assets Normalized revenueNeon Company, a CPA firm, conducted an audit for the 2020 financial statements of Gold Corporation. The auditors checked the vendors' invoices for particular information. This is an example of: * Confirmation Inspection of documents Inquiry Recalculation None of the above
- Kim Company, a CPA firm, conducted an audit for the 2020 financial statements of Erin Corporation. The auditors found that the accounting manager changed the journal entry for estimating bad debt expense to a smaller number to hide the poor results from extending credit to high risk customers. This made income materially higher than it otherwise would have been. This is an example of: Embezzlement Employee fraud Larceny Management fraud O None of the aboveYou were first appointed auditor of the RST Corporation in 2020. You completed the audit for 2020 and prepared audited financial statements directly from the audit working papers. You have returned to make the 2021 audit and discovered that the client's bookkeeper failed to record the adjusting entries you made in 2020 audit working papers, which entailed adjustments for the following items The December 31, 2020 inventory was understated by P5,000. No entry was made for accrued utilities expense of P2,500 as of year-end. Ordinary motor repairs of P3,200 were charged to Accumulated Depreciation during 2020. The company failed to record the provision for uncollectible accounts in the amount of P6,000. Your examination of the 2021 entries in the accounts uncovered the following: An expenditure of P10,000 for repairs of office equipment had been charged to furniture and Equipment. The company records depreciation at 10% of the December 31 balance of the Property and Equipment accounts.…In an audit of the Marco Corporation as of December 31, 2013,the following situations exist. No entries have been made in the accounting records inrelation to these items.1. During the year 2013, the Marco Corporation was named as a defendant in a suit fordamages by the Dalton Company for breach of contract. An adverse decision to theMarco Corporation was rendered and the Dalton Company was awarded $4,000,000damages. At the time of the audit, the case was under appeal to a higher court.2. On December 23, 2013, the Marco Corporation declared a common stock dividendof 1,000 shares with a par value of $1,000,000 of its common stock, payableFebruary 2, 2014, to the common stockholders of record December 30, 2013.3. The Marco Corporation has guaranteed the payment of interest on the 10-year, firstmortgage bonds of the Newart Company, an affiliate. Outstanding bonds of theNewart Company amount to $5,500,000 with interest payable at 5% per annum, dueJune 1 and December 1 of each year. The…
- The auditor was unable to confirm from the Bills receivable amounted OMR 250,000 by communicating with the Sundry debtors or customers. What type of Audit opinion should be expressed by the auditor in this situation? Unmodified opinion Qualified opinion Disclaimer of opinion Adverse opinion Next page ments Jump to... Auditing and Cont ENAnswer the following subquestion as a result of an audit: a. How much is the correct carrying value of the notes payable as of December 31, 2023? b. How much is the correct interest expense that Meekah should recognized in the December 31, 2023 statement of comprehensive income? c. How much of the note is reported in the non-current liability section of the December 31, 2023 statement of financial position?The errors below were noted after the books of CalMart Corporation were audited at the close of 2021 Indicate the effects of each of the following errors with an O for overstatement, U for understatement and N for no effect in the appropriate column. 2020 2021 Retaine Retained Retained d Earnings,befo Re, Earnings, befo Earning s, after closing Net Net Incom re after Incom re Asset Liability closing closing Asset Liability closing e Failure to record purchases of merchandise on account of P2,000 at the end of 2020. Sale of merchandise on account on December 30,2020 amounting to P2,000 was not recorded until the customer paid his account on january 2021. Depreciation expense on equipment in 2020 was overstated by P1,000. Paid one year insurance premium of P2,000 effective April 1,2020. The entire amount was debited to expense account and no adjustment was made at the end of 2020. On December 31,2020, the Company acquired a parcel of land and a building at a total cost of P5,000,000. The…
- What type of auditor report would be issued in each of the following cases? Justify your choice. Bowles Company is engaged in a hazardous trade and cannot obtain insurance coverage from any source. A material portion of the company’s assets could be destroyed by a serious accident. Drave Company owns substantial properties that have appreciated significantly in value since the date purchase. The properties were appraised and are reported in the balance sheet at the appraised values with full disclosure. The CIAs believe that the appraised values reported in the balance sheet reasonably estimate the assets current values. The CIA firm is auditing the financial statement that are to be included in the annual report to the stockholder of Eagle Company, A regulated company Eagle’s Financial Statement are prepared as prescribed by a regulatory agency of the Pakistan Government and some items are not presented in accordance with generally accepted accounting principles. The amounts…Aya Company, a CPA firm, conducted an audit for the 2020 financial statements of Tamer Corporation. The auditors examined the qualitative factors in making materiality judgement. The auditors would consider the: O Absolute size Relative size Cumulative effects O Nature of the item O None of the aboveBelow here were subsequent event that occurs in your client. Consider that all events were has material effect on client’s financial statement. The auditor is auditing financial statement for the year ended December 31, 2020 and is completing the audit in March 15, 2021.4) On February 15, 2021, the civil court decided that Client Company must pay compensation loss due to defect product sold to their customer. lawsuits started in court since June 20205) On February 20, 2021, a major of client customer which has large amount of outstanding A/R suddenly fill for bankruptcy6) On April 1, 2021 fire rage accident destroy client warehouse and the loss were materialQuestions:Indicate type 1 subsequent event, type 2 subsequent event, or not subsequent event. What kinds of action, client need to do? Adjust, disclose, or no need to do adjust/disclose for every point form 1) to 6). Provide the reason why it should be adjusted or disclose or neither.
