Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 18, Problem 5DQP
a.
To determine
Indicate the transaction related audit objective for each misstatement.
b.
To determine
Indicate control that should have prevented occurring on a continuous basis for each misstatement.
c.
To determine
Indicate the substantive
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The following misstatements are included in the accounting records of the Dillon Manufacturing Company:
Cash paid on accounts receivable was stolen by the mail clerk when the mail was opened.
A sales invoice was miscalculated by $1,000 as a result of a key-entry mistake.
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A material sale was recorded on the last day of the year even though the goods were not shipped until three days later.
Merchandise was shipped to a customer, but no bill of lading was prepared. Because billings are prepared from bills of lading, the customer was not billed.
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The following misstatements are included in theaccounting records of the Joyce Manufacturing Company:1. A sales invoice was miscalculated by $1,000 as a result of a key-entry mistake.2. Cash paid on accounts receivable that had been prelisted by a secretary was stolenby the bookkeeper who records cash receipts and accounts receivable. He failed torecord the transactions.3. A material sale was recorded on the last day of the year even though the goods werenot shipped until 3 days later.4. Merchandise was shipped to a customer, but no bill of lading was prepared. Becausebillings are prepared from bills of lading, the customer was not billed.5. The controller approved a payment to a consulting firm owned by his sister. Theconsulting firm did not actually perform any services for the company.6. The shipping clerk included several additional valuable items to a shipment that werenot included in the customer’s order and were not invoiced to the customer. Theshipping clerk has an arrangement…
For each of the following situations, indicate which internal con ucedure
Johnson Company has violated:
1. Since they are costly, background chec. are not done for the employees.
Purchases of items on credit do not need the approval of the purchasing
2.
department.
All hard copies of documents are shredded after one month and electronic records
3.
are deleted
after two months.
4. The company does not prepare operating or cash budgets.
The accountant receives the checks from customers in payment of amounts due
5.
and records the
cash receipts.
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The hiring, firing and pay adjustments are made by the foremen in the
7.
manufacturing area.
Chapter 18 Solutions
Auditing And Assurance Services
Ch. 18 - List five asset accounts, three liability...Ch. 18 - Prob. 2DQPCh. 18 - Prob. 3DQPCh. 18 - Prob. 4DQPCh. 18 - Prob. 5DQPCh. 18 - Prob. 6DQPCh. 18 - Prob. 7DQPCh. 18 - Prob. 8DQPCh. 18 - Prob. 9DQPCh. 18 - Prob. 10DQP
Ch. 18 - Prob. 11DQPCh. 18 - Prob. 13DQPCh. 18 - Prob. 14DQPCh. 18 - Prob. 15DQPCh. 18 - Prob. 16.1MCQCh. 18 - Prob. 16.2MCQCh. 18 - Prob. 16.3MCQCh. 18 - Prob. 17.1MCQCh. 18 - Prob. 17.2MCQCh. 18 - Prob. 17.3MCQCh. 18 - Prob. 18.1MCQCh. 18 - Prob. 18.2MCQCh. 18 - Prob. 18.3MCQCh. 18 - Prob. 19DQPCh. 18 - Prob. 20DQPCh. 18 - Prob. 21DQPCh. 18 - Prob. 22DQPCh. 18 - The following misstatements are included in the...Ch. 18 - Prob. 24DQPCh. 18 - Prob. 25DQPCh. 18 - Prob. 26DQPCh. 18 - Prob. 27DQPCh. 18 - Prob. 28DQPCh. 18 - Prob. 30C
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