Answered: You have been employed Arens & Elder…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

You have been employed Arens & Elder CPA for many years. As a training officer for the firm, part of your responsibility include training new staff before they are sent out on an initial audit job. Three new members of staff are expected to work on the audit of Flemings Limited. Your training of these new staff members will focus on management assertions and audit procedures. The following are various management assertions (1 through 10), made by Flemings, that are related to their sales and accounts receivable. i. All sales transactions have been recorded. ii. Receivables are appropriately classified as to trade and other receivables in the financial statements and are clearly described. iii. Accounts receivable are recorded at the correct amounts. iv. Sales transactions have been recorded in the proper period. v. Sales transactions have been recorded in the appropriate accounts. vi. All required disclosures about sales and receivables have been made. vii. All accounts receivable have been recorded. viii. There are no liens or other restrictions on accounts receivable. ix. Disclosures related to receivables are at the correct amounts. x. Recorded sales transactions have occurred Required A. Explain the differences among management assertions about classes of transactions and events, management assertions about account balances, and management assertions about presentation and disclosure. B. For each assertion numbered 1 – 10 above, indicate whether it is an assertion about classes of transactions and events, an assertion about account balances, or an assertion about presentation and disclosure. C. Indicate the name of the assertion made by management. D. Outline TWO (2) audit procedures that the auditors could perform to test EACH management assertions 1, 3, and 4 in the list of assertion

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions