You are engaged in the audit of Eunise Co., a new client. The Eunise Company is on a ca vear basis. The following data were found during your audit: a) Goods in transit shipped FOB destination by a supplier in the amount of P20,000 excluded from the inventory, and further testing revealed that the purchase recorded. b) Goods costing P10,000 had been received, included in inventory, and recorded as a However, your inspection revealed that the goods were found to be defective and immediately returned. :) Materials costing P50,000 and billed on December 30 at a selling price of P64,000,

You are the audit engagement partner and you noted the following during the review of the audit files of your clients: For each situation, describe with reason(s) the form of audit report that you should issue. (i)The audit team for 1st client could not observe the inventory count that was held at the year-end since the firm’s appointment as auditors was made after the company’s year-end and no alternative procedures could be used to confirm the inventory balance. (ii)Your 2nd client is currently building a distribution centre using its own employees on its own premises. In total, the company recorded a net profit of RM 40 million. The cost of direct labour amounted to RM 4 million, based on the cost records kept. This direct labour cost was included in the distribution center's cost. However, it is discovered that  the direct labour costs are not supported as the related costing record have been accidentally destroyed.   The collapse of many public companies in the last few years has…

During the audit of MJ Precious Metals Inc, the auditor observes the physical count at year-end and recalculates the mathematical accuracy of a sample of inventory on hand. Which of the two test of details results in existence assertion?  Both test of details results in existence assertion.Recalculating the mathematical accuracy of a sample of inventory on hand.No test shows the detail results in existence assertion.Observing the physical count at year-end.

Consider the following audit work performed by two auditors, Suzy and Gary:(a) Suzy attended the client’s year-end stocktake and observed that the client followed the stocktake instructions. She selected numerous items for test counting from the client’s inventory sheets and all were found to be correct. Cut-off details were noted and subsequently checked and found to be correctly treated. Suzy concluded that inventory was fairly stated.(b) Maintenance expenses were material, although it was only 50% of last year’s balance. Gary selected a large sample of entries and agreed them to supporting documents. No errors were found. Gary concluded that maintenance expenses were reasonable. Required:Indicate whether sufficient appropriate audit evidence has been obtained to support the conclusions for the inventory and maintenance expenses accounts.Explain your answers.

You are working as a summer intern for AAA Auditing, Inc. You have been asked to help resolve discrepancies noted in the audit for Dolfin Corporation, a retailer of specialty aquarium supplies.As a retail company, Dolfin Corporation uses the perpetual inventory system. To prepare for this assignment, you have been asked to review your knowledge of salesand purchase transactions by completing the following table.Consider the effect of each transaction on the three accounts listed, and identify which accounts are debited or credited. If not affected by the transaction, select "No Effect".  Inventory Estimated Returns Inventory Cost of Goods Sold Purchase of merchandise for resale Debit      Cash sale of merchandise Credit      Customer returns Debit      Yearly estimate for customer returns       Freight paid for merchandise purchased FOB shipping point Debit      Return of merchandise purchased for resale Credit      Freight paid for sales with FOB destination     No Effect  Sale on…

The following two tests were carried out on the accounts payable at Gardens Nursing Home:  1: A number of suppliers were selected from the list of trade creditors at year-end and  balances traced to supplier invoices and goods received notes to ensure goods were  received prior to the year-end. For two creditors out of 15 tested the balance was only  marginally overstated.  Audit conclusion: Accepted as no material errors located.  2: Selected a number of suppliers’ invoices and checked that the pricing and discount terms  have been reviewed and authorized by the purchase manager. Three out of 20 invoices  tested had not been authorized and incorrect discounts were recorded for these invoices. A  follow-up of the three samples with deviations did not highlight a pattern or specific reason  for the errors.  Audit conclusion: Accepted as the errors in discounts claimed were immaterial.  Required: For each of the test results for Gardens Nursing Home:  (a) Identify whether this is a test…

As the auditor for Company A, you discover that a material sale ($500,000 sale; cost of goods of $300,000) was made to a customer this year.  Because of poor internal accounting controls, the sale was never recorded.  Your client makes a management decision not to bill the customer because such a long time has passed since the shipment was made.  You determine, to the best of your ability, that the sale was not fraudulent.  Using the framework for ethical decision making, determine whether the auditor should require either a recording or a disclosure of the sales transaction.  Instructions: Using the framework for ethical decision making, determine whether the auditor should require either a recording or a disclosure of the sales transaction.  Please make sure to use at least 100 words in your response.  Once you give your response, please respond to at least two of your peers using at least 50 words in your responses.  Remember to follow the netiquette guidelines found in the course…

You are involved with the audit of Jelco Company for year 1 and have been asked to consider the confirmation reply results indicated below. For each confirmation reply, select the proper action to be taken from the following possible actions: (Each of the "Action" items may be used once, more than once, or not at all.) (1)Exception; propose an adjustment. (2)Send a second confirmation request to the customer. (3) Examine shipping documents and/or subsequent cash receipts. (4)Verify whether the additional invoices noted on the confirmation reply pertain to the year under audit or the subsequent year. (5) Not an exception; no further audit work is necessary. Proper Action Customer Reply (and any audit action already taken) a. "We mailed the check for this on December 31." "We returned those goods on December 2." You have been able to determine that the goods were received by the client on December 29, but not recorded until January 2. c. "We also owe for two more invoices for purchases…

Please answer no.19-20 correctly and provide computation. Thank you;)

Detection of Errors and Fraud. For each of the following independent events, indicate the (1) effect of the error or fraud on the financial statements and (2) what auditing procedures could have detected the misstatement resulting from error or fraud.a. The physical inventory count of J. Payne Enterprises, which has a December 31 year-end, was conducted on August 31 without incident. In September, the perpetual inventory was not reduced for the cost of sales.b. Holmes Drug Stores counted its inventory on December 31, which is its fiscal year-end. The auditors observed the count at 20 of Holmes’s 86 locations. The company falsified the inventory at 20 of the locations not visited by the auditors by including fictitious goods in the counts.c. Pope Automotive inadvertently included in its inventory automobiles that it was holding on consignment for other dealers.d. Peffer Electronics Inc. overstated its inventory by pricing wiring at $200 per hundred feet instead of $200 per thousand…