Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 21, Problem 26DQP
a.
To determine
To calculate the gross margin and inventory turnover ratio.
b.
To determine
The causes leading to changes in ratios.
c.
To determine
To identify the possibility of material misstatements in calculated ratios..
d.
To determine
To identify the causes of potential misstatements.
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Accountants at UltraTech obtain their values for inventory and total assets, calculate the balance sheet percentage by dividing inventory by total assets for each year and summarize the observations for the relative size of inventory to total assets for each year and percentage change from year-to-year. This would allow them to effectively assess:
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PART 1: Identify the assertions for each of the following substantive procedures: (a) Review the monthly breakdown of sales for the main inventory item, compare to previous years, to budget, and investigate any significant differences. (b) Review the total amount of sales, compare to previous year, compare to budget, and investigate any significant differences. (c) For a selected sample of sales invoices, confirm that the sales price stated matches with the authorised price list. (d) Review post year-end sales returns and agree if they relate to pre-year-end sales that the revenue has been correctly removed from the sales records. PART 2: Explain the relevance and rellability of the following two cases as 'source of evidence. (a) The managers of a company have provided their audit firm with an oral representation confirming that the bank overdraft balances included within current liabilities are complete. (b) The managers of a company have provided their audit firm a copy of their…
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The auditor has asked you to prepare additional information about Dolfin Company’s results for last year. Use the data shown on the income statement in your computations.
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Chapter 21 Solutions
Auditing And Assurance Services
Ch. 21 - Prob. 1RQCh. 21 - Prob. 2RQCh. 21 - Prob. 3RQCh. 21 - Prob. 4RQCh. 21 - Prob. 5RQCh. 21 - Prob. 6RQCh. 21 - Prob. 7RQCh. 21 - Prob. 8RQCh. 21 - Prob. 9RQCh. 21 - Prob. 10RQ
Ch. 21 - Prob. 11RQCh. 21 - Each employee of the Gedding Manufacturing Co., a...Ch. 21 - Prob. 13.1MCQCh. 21 - Prob. 13.2MCQCh. 21 - Prob. 13.3MCQCh. 21 - Prob. 14.1MCQCh. 21 - Prob. 14.2MCQCh. 21 - Prob. 14.3MCQCh. 21 - Prob. 15.1MCQCh. 21 - Prob. 15.2MCQCh. 21 - Prob. 15.3MCQCh. 21 - Prob. 16DQPCh. 21 - Prob. 17DQPCh. 21 - Prob. 18DQPCh. 21 - Prob. 19DQPCh. 21 - Prob. 20DQPCh. 21 - Prob. 21DQPCh. 21 - Prob. 22DQPCh. 21 - Prob. 23DQPCh. 21 - Prob. 24DQPCh. 21 - Prob. 25DQPCh. 21 - Prob. 26DQPCh. 21 - Prob. 27DQPCh. 21 - Prob. 28DQPCh. 21 - Prob. 29DQPCh. 21 - Prob. 30C
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