Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 11, Problem 49ITC
To determine
Describe the procedures to be done for resolving the confirmations.
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Rachel, a CPA, is engaged to audit the financial statements of Nestor Company for the year ended December31, 20x1. Rachel obtained and documented an understanding of internal control relating to the purchasingprocess and set control risk at the maximum level. Rachel requested and obtained from Nestor a scheduleanalyzing prepaid insurance as of December 31, 20x1, and sent a confirmation request to Nestor’s broker.
a. What substantive procedures should Rachel conduct in verifying the schedule of prepaid insurance and inresponding appropriately to the following assertions?
1) Existence and completeness2) Rights and obligations3) Valuation or allocation4) Presentation and disclosure
b. What is the importance of the audit evidence gathered from the audit procedures?
Rachel, a CPA, is engaged to audit the financial statements of Nestor Company for the year ended December 31, 20x1. Rachel obtained and documented an understanding of internal control relating to the purchasing process and set control risk at the maximum level. Rachel requested and obtained from Nestor a schedule analyzing prepaid insurance as of December 31, 20x1, and sent a confirmation request to Nestor’s broker.
What substantive procedures should Rachel conduct in verifying the schedule of prepaid insurance and in responding appropriately to the following assertions?
Existence and completeness
Rights and obligations
Valuation or allocation
Presentation and disclosure
What is the impOrtance of the audit evidence gathered from the audit procedures?
Sharon, an audit manager assigned to the audit of Newsome Corporation is observing the client's revenue-receivables cycle. Sharon
observes that the IT system responsible for processing and posting receivable transactions produces a daily exceptions report which is
emailed to an accounts receivable clerk responsible for investigating the exceptions. Which of the following most accurately describes
the type of control that is responsible for determining possible exceptions and forwarding them on to the accounts receivable clerk?
• This type of control is typically referred to as a detective control. These types of controls usually assist the client in detecting items
that need further investigation. These controls help to minimize misstatements in the financial statements.
• This type of control is typically known as a manual IT control. This name is derived from the fact that although the control allows
initial processing by the client's IT system, it is flagged for manual follow up.
•…
Chapter 11 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 11 - Explain the difference between a customers order...Ch. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - State briefly the objective of the billing...Ch. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQ
Ch. 11 - Prob. 11RQCh. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. 16RQCh. 11 - Prob. 17RQCh. 11 - Prob. 18RQCh. 11 - Prob. 19RQCh. 11 - Prob. 20RQCh. 11 - Prob. 21RQCh. 11 - Prob. 22RQCh. 11 - Give an example of a type of receivable...Ch. 11 - Prob. 24RQCh. 11 - Prob. 25QRACh. 11 - Prob. 26QRACh. 11 - Prob. 27QRACh. 11 - Prob. 28QRACh. 11 - Prob. 29QRACh. 11 - Prob. 30QRACh. 11 - Prob. 31QRACh. 11 - Prob. 32QRACh. 11 - Prob. 33QRACh. 11 - Prob. 34QRACh. 11 - Prob. 35QRACh. 11 - Prob. 36AOQCh. 11 - Which of the following would provide the most...Ch. 11 - Prob. 36COQCh. 11 - Prob. 36DOQCh. 11 - Prob. 36EOQCh. 11 - Under SEC rules, which of the following is not...Ch. 11 - Prob. 36GOQCh. 11 - Prob. 36HOQCh. 11 - Prob. 36IOQCh. 11 - Prob. 36JOQCh. 11 - Prob. 36KOQCh. 11 - Prob. 36LOQCh. 11 - Prob. 37OQCh. 11 - Prob. 38OQCh. 11 - An auditors working papers include the following...Ch. 11 - Prob. 40OQCh. 11 - Prob. 41OQCh. 11 - Prob. 42OQCh. 11 - Prob. 43OQCh. 11 - Prob. 44PCh. 11 - Prob. 45PCh. 11 - Prob. 46PCh. 11 - Prob. 47PCh. 11 - The July 31, 20X0, general ledger trial balance of...Ch. 11 - Prob. 49ITCCh. 11 - Prob. 50ECCh. 11 - Prob. 51EC
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