Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 15, Problem 38C
a.
To determine
Identify the procedures for which audit sampling for exceptions be conveniently used.
b.
To determine
Identify the most appropriate sampling unit for conducting most of the audit sampling tests.
c.
To determine
Identify the
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For the audit of Carbald Supply Company, CaroleWever, CPA, is conducting a test of sales for 9 months of the year ended December 31,2013. Included among her audit procedures are the following:1. Foot and cross-foot the sales journal and trace the balance to the general ledger.2. Review all sales transactions for reasonableness.3. Select a sample of recorded sales from the sales journal and trace the customername and amounts to duplicate sales invoices and the related shipping document.4. Select a sample of shipping document numbers and perform the following tests:a. Trace the shipping document to the related duplicate sales invoice.b. Examine the duplicate sales invoice to determine whether copies of the shippingdocument, shipping order, and customer order are attached.c. Examine the shipping order for an authorized credit approval.d. Examine the duplicate sales invoice for an indication of internal verificationof quantity, price, extensions, footings, and trace the balance to the…
In the audit process, the following data were obtained from the books of Feel na Feel, Inc., which uses a voucher system. All invoices are subject to terms 2/10, n/30, and are entered net with the discount entered in Purchase Discounts column of the voucher register. The accountant in charge of the books went on leave to attend to his family based in New Jersey. A fresh accountancy graduate has been assigned to record the transactions. At year-end, the substitute accountant finds that the unpaid vouchers do not agree with the Vouchers Payable control account. You are called to adjust the matter.A schedule of unpaid vouchers as of December 31, 20x1, all of which are net of discount, is presented to you.Date Voucher No. Supplier AmountNov. 27 896 Balentong Traders P78,400Dec. 2 909 Shala Company 19,60011 918 Mukasim Dealers 44,10020 952 Boom Panes, Inc. 17,15021 955 Edi Wow Company 22,05022 968 Neknek Company 80,85031 982 Bebot, Inc. 78,400P340,550Vouchers Payable (Control Account)Cash…
In the audit process, the following data were obtained from the books of Feel na Feel, Inc., which uses avoucher system. All invoices are subject to terms 2/10, n/30, and are entered net with the discount enteredin Purchase Discounts column of the voucher register. The accountant in charge of the books went on leaveto attend to his family based in New Jersey. A fresh accountancy graduate has been assigned to recordthe transactions. At year-end, the substitute accountant finds that the unpaid vouchers do not agree withthe Vouchers Payable control account. You are called to adjust the matter.A schedule of unpaid vouchers as of December 31, 20x1, all of which are net of discount, is presented toyou.Date Voucher No. Supplier AmountNov. 27 896 Balentong Traders P78,400Dec. 2 909 Shala Company 19,60011 918 Mukasim Dealers 44,10020 952 Boom Panes, Inc. 17,15021 955 Edi Wow Company 22,05022 968 Neknek Company 80,85031 982 Bebot, Inc. 78,400P340,550Vouchers Payable (Control Account)Cash…
Chapter 15 Solutions
Auditing And Assurance Services
Ch. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - Prob. 3RQCh. 15 - Prob. 4RQCh. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Prob. 7RQCh. 15 - Prob. 8RQCh. 15 - Prob. 9RQCh. 15 - Prob. 10RQ
Ch. 15 - Prob. 11RQCh. 15 - Prob. 12RQCh. 15 - Prob. 13RQCh. 15 - Prob. 14RQCh. 15 - Distinguish between the TER and the CUER. How is...Ch. 15 - Prob. 16RQCh. 15 - Prob. 17RQCh. 15 - Prob. 18RQCh. 15 - Prob. 19RQCh. 15 - Prob. 20RQCh. 15 - Prob. 21RQCh. 15 - Prob. 22RQCh. 15 - Prob. 23.1MCQCh. 15 - Prob. 23.2MCQCh. 15 - Prob. 23.3MCQCh. 15 - Prob. 24.1MCQCh. 15 - Prob. 24.2MCQCh. 15 - Prob. 24.3MCQCh. 15 - Prob. 25.1MCQCh. 15 - Prob. 25.2MCQCh. 15 - Prob. 25.3MCQCh. 15 - Prob. 26.1MCQCh. 15 - Prob. 26.2MCQCh. 15 - Prob. 26.3MCQCh. 15 - Prob. 27DQPCh. 15 - Prob. 28DQPCh. 15 - Prob. 30DQPCh. 15 - Prob. 31DQPCh. 15 - Prob. 32DQPCh. 15 - Prob. 36DQPCh. 15 - Prob. 37DQPCh. 15 - Prob. 38C
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- You are assigned to do the audit the work for Howard Ltd for the calendar year 2019, you found some issues that you believe represent possible adjustments to the company’s books. In addition, there are other issues that need to be addressed. The matters include: Several credit memos that were processed and recorded after year-end relate to sales and account receivables for 2019. These total $42 000. Electricity and other utilities’ invoices received after the cut-off date $30,000 Inventory cut-off tests indicate that $35 000 of inventory received on 30 December 2019 was recorded as purchases and accounts payable in 2020. These items were included in the inventory count at year-end and were therefore included in ending inventory. On 15 December 2019, Howard Ltd declared a bonus issue of 2 000 shares with a par value of $100 000 of its ordinary shares, payable 25 January 2020 to the ordinary shareholders on record as in 30 December 2019. Howard Ltd has not established a reserve for…arrow_forwardThe following sales procedures were encountered duringthe annual audit of Marvel Wholesale Distributing Company:Customer orders are received by the sales order department. A clerk computes theapproximate dollar amount of the order and sends it to the credit department for approval.Credit approval is stamped on the order and sent to the accounting department. A computer isthen used to generate two copies of a sales invoice. The order is filed in the customer order file.The customer copy of the sales invoice is held in a pending file awaiting notification thatthe order was shipped. The shipping copy of the sales invoice is routed through the warehouse, and the shipping department has authority for the respective departments to releaseand ship the merchandise. Shipping department personnel pack the order and manuallyprepare a three-copy bill of lading: The original copy is mailed to the customer, the secondcopy is sent with the shipment, and the other is filed in sequence in the bill of…arrow_forwardAs you are planning the annual audit of Norton Corporation, you note at the company has a number of user operated computers in use in various locations. One of the machines has been installed in the stores department, which has the responsibility for disbursing stock items and for maintaining stores records. In your audit, you find that one employee receives the requisitions for stores, disburses the stock, maintains the records, operates the computer, and authorizes adjustments to the total amounts of stock recorded by the computer. When you discuss the applicable controls with the department manager, you are told that the user operated computer is assigned exclusively to that department. Therefore, the manager contends that it does not require the same types of controls applicable to large IT systems. b. Discuss five types of control that would apply to this microcomputer application.arrow_forward
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