Principles Of Auditing & Other Assurance Services
Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 17, Problem 36P
To determine

Identify the necessary departures and implications if any related to the given audit findings.

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Hall accepted an engagement to audit the year 1 financial statements of XYZ Company. XYZcompleted the preparation of the year 1 financial statements on February 13, year 2, and itsauditors began the fieldwork on February 17, year 2. Hall completed gathering sufficientappropriate evidence on March 24, year 2; Hall’s report and XYZ’s financial statements werereleased on March 28, year 2. The written representations normally would be dateda. February 13, year 2.b. February 17, year 2.c. March 24, year 2.d. March 28, year 2.
Ross & Ross, CPAS, performed an audit of the financial statements of Ruby Manufacturing for the year ended December 31, 20X7 and issued their report on March 2, 20X8. As of April 1, 20X8, due to various circumstances, Ross & Ross was no longer independent from Ruby Manufacturing and did not perform any further audits of the company's financial statements. On June 15, 20X8, Ross & Ross was asked to re-sign the audited financial statements of Ruby Manufacturing for the year ended December 31, 20x7. Which of the following is TRUE regarding this situation? Since Ross & Ross, CPAS are no longer independent of Ruby Manufacturing, they may not re-sign the audit report. If post audit work was performed after March 2, 20X8, Ross & Ross, CPAs would not be able to re-sign the report. If post audit work was performed from April 1, 20X8 until June 15, 20X8, Ross & Ross, CPAs would not be able to re-sign the report. Since Ross & Ross, CPAS was independent at the time the report was issued, there is…
As a part of his audit of the financial statements of Marlborough Corporation for the year ended March 31, 199X, Mark Wayne, CIA is reviewing the balance sheet presentation of a $1,200,000 advance to Franklin Olds. Marlborough’s president. The advance, which represents 50 percent of current assets and 10 percent of total assets, was made during the year ended March 31, 199X. it has been described in the balance sheet as “miscellaneous accounts receivable” and classified as a current assets.             Olds informs the CIA that he has used the proceeds of the advance to purchase 35,000 shares of Marlborough’s common stock, in order to forestall a takeover raid on the company. He is reluctant to have his association with the advance described in the financial statements because he does not have voting control and fears that this will “just give the raiders ammunition.”          Olds offers the following four-point program as an alternative to further disclosure” (1)          Have the…
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