Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 16, Problem 36QRA
a.
To determine
Explain how the auditor using the iron curtain approach can determine the requirement of adjustment.
b.
To determine
Explain how the auditor using the rollover approach can determine the requirement of adjustment.
c.
To determine
Describe the requirement of SEC Staff Accounting Bulletin No. 108 under the given situation.
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Pat Colt is auditing the financial statements of Manning Company. The following is a summary of the uncorrected
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Manning paid them) but should have been recognized in 2023.
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Pat Colt is auditing the financial statements of Manning Company. The following is a summary of the uncorrected misstatements that
Colt has identified during the past three years. These misstatements are Immaterial and have related to Isolated matters. In this
summary, parentheses Imply that the misstatements would have reduced balances if they had been corrected (e.g., In 2020, the
misstatements would have reduced net income by $82,500, assets by $100,000, liabilities by $17,500, and equity by $82,500 if
corrected).
Year
2020
2021
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$ (82,500)
(22,000)
30,000
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$ (100,000)
(25,500)
30,000
Effect on
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$ (17,500)
(3,500)
0
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$ (82,500)
(22,000)
30,000
During the most recent audit, Colt concluded that expenses totaling $130,000 were recognized in January 2024 (when Manning paid
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Required:
a. What is the dollar Impact of the misstatement identified in 2023 on each of the following…
Pat Colt is auditing the financial statements of Manning Company. The following is a summary of the uncorrected
misstatements that Colt has identified during the past three years. These misstatements are immaterial and have
related to isolated matters. In this summary, parentheses imply that the misstatements would have reduced balances if
they had been corrected (e.g., in 2020, the misstatements would have reduced net income by $82,500, assets by
$100,000, liabilities by $17,500, and equity by $82,500 if corrected).
Year
2020
2021
2022
Effect on Net
Income
$ (82,500)
(22,000)
30,000
Effect on
Assets
$ (100,000)
(25,500)
30,000
Effect on
Liabilities
$ (17,500)
(3,500)
0
During the most recent audit, Colt concluded that expenses totaling $130,000 were recognized in January 2024 (when
Manning paid them) but should have been recognized in 2023.
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Note:…
Chapter 16 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Identify three items often misclassified as...Ch. 16 - Prob. 4RQCh. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - What safeguards should be employed when the...
Ch. 16 - You are asked by a client to outline the...Ch. 16 - Prob. 12RQCh. 16 - Prob. 13RQCh. 16 - Prob. 14RQCh. 16 - Prob. 15RQCh. 16 - What are loss contingencies? How are such items...Ch. 16 - Prob. 17RQCh. 16 - Prob. 18RQCh. 16 - Prob. 19RQCh. 16 - What is the meaning of the term commitment? Give...Ch. 16 - Prob. 21RQCh. 16 - What are subsequent events?Ch. 16 - Describe the manner in which the auditors evaluate...Ch. 16 - Prob. 24RQCh. 16 - Prob. 25RQCh. 16 - Prob. 26RQCh. 16 - In your audit of the financial statements of Wolfe...Ch. 16 - Prob. 28QRACh. 16 - Prob. 29QRACh. 16 - Prob. 30QRACh. 16 - Prob. 31QRACh. 16 - The auditors opinion on the fairness of financial...Ch. 16 - Prob. 33QRACh. 16 - Prob. 34QRACh. 16 - Prob. 35QRACh. 16 - Prob. 36QRACh. 16 - Prob. 37AOQCh. 16 - Prob. 37BOQCh. 16 - Prob. 37COQCh. 16 - When auditing the statement of cash flows, which...Ch. 16 - The search for unrecorded liabilities for a public...Ch. 16 - The aggregated misstatement in the financial...Ch. 16 - Prob. 37GOQCh. 16 - Prob. 37HOQCh. 16 - Prob. 37IOQCh. 16 - Prob. 37JOQCh. 16 - Prob. 37KOQCh. 16 - Which of the following events occurring on January...Ch. 16 - Prob. 38OQCh. 16 - Prob. 39OQCh. 16 - Prob. 40OQCh. 16 - Match the following terms to the appropriate...Ch. 16 - Prob. 42OQCh. 16 - Prob. 43PCh. 16 - Prob. 44PCh. 16 - Prob. 45PCh. 16 - Prob. 46PCh. 16 - Prob. 47PCh. 16 - Prob. 48PCh. 16 - The audit staff of Adams, Barnes Co. (ABC), CPAs,...Ch. 16 - Prob. 50RDC
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