Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 21, Problem 47P
Devry Corporation has established an independent foundation for the purposes of community improvement. The foundation employs an executive director and eight staff people. The internal auditors of the company were requested to do an audit of the foundation in 20X1 to determine problems with the recording of transactions, the handling of cash, and documentation of transactions. The following items were found:
- 1. The foundation used the cash basis of reporting rather than the accrual basis.
- 2. The foundation lacked a copy of the plane ticket for airfare reimbursed for a trip taken by one of the volunteers.
- 3. Excess funds were invested in instruments other than those specified by the organization’s policy manual.
- 4. The purchase of a desktop publishing system was expensed.
- 5. The foundation does not employ anyone with formal accounting training.
- 6. Many errors were made in recording transactions, which necessitated many year-end
adjusting entries . - 7. Numerous certificates of deposit were found in many different locations (e.g., filing cabinets, desk drawers, and a safe deposit box).
- 8. The checking account was reconciled by the individual who wrote the checks.
Required:
Write an internal audit report (in proper form) to the executive committee of the foundation indicating findings and recommendations. (CIA, adapted)
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As the engagement partner, you have reviewed the audit working papers of Royal Height
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1. Thirty percent of the company's recorded turnover (revenue) comprises of cash
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2. During the current year, the company changed the method of charging depreciation
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However, all the required disclosures have been included in the notes to the financial
statements.
Required:
Discuss the impact of each of the above matters on your audit report.
1
The following data was gathered during one of the recent audits of Cash Disbursement Section. One of the findings was on the outdated Delegation of Authority to policy. In preparing a report of the findings, identify the elements of an audit findings for each data (in order).
I. Authority over the disbursement of funds should only be delegated to individuals whose responsibility justify such authority.
II. The delegation authority is updated biannually and not when changes in personnel or responsibilities of authorized individuals occur.
III. Disbursements may be made that are not in accordance with management's or BOD's direction.
IV. The delegation of authority policy list three individuals who are no longer with the company. Additionally, four individuals were identified who are new in their positions that should have disbursement authority but are not listed in the policy.
a. Condition, Effect, Cause, Criteria
b. Cause, Effect, Condition, Criteria
c. Cause, Condition,…
The following data was gathered during one of the recent audits of Cash Disbursement Section. One of the findings was on the outdated Delegation of Authority to policy. In preparing a report of the findings, identify the elements of an audit findings for each data (in order).
I. Authority over the disbursement of funds should only be delegated to individuals whose responsibility justify such authority.
II. The delegation authority is updated biannually and not when changes in personnel or responsibilities of authorized individuals occur.
III. Disbursements may be made that are not in accordance with management's or BOD's direction.
IV. The delegation of authority policy list three individuals who are no longer with the company. Additionally, four individuals were identified who are new in their positions that should have disbursement authority, but are not listed in the policy.
Choices:Criteria, Cause, Effect, Condition
Cause, Effect, Condition, Criteria
Cause, Condition, Effect,…
Chapter 21 Solutions
Principles Of Auditing & Other 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 - Prob. 12RQCh. 21 - Prob. 13RQCh. 21 - Prob. 14RQCh. 21 - Prob. 15RQCh. 21 - Prob. 16RQCh. 21 - Prob. 17RQCh. 21 - Prob. 18RQCh. 21 - Prob. 19RQCh. 21 - Prob. 20RQCh. 21 - Prob. 21RQCh. 21 - Prob. 22RQCh. 21 - Prob. 23RQCh. 21 - Prob. 24RQCh. 21 - Prob. 25RQCh. 21 - Prob. 26RQCh. 21 - Prob. 27RQCh. 21 - Prob. 28RQCh. 21 - Prob. 29RQCh. 21 - Explain how major federal assistance programs are...Ch. 21 - Describe what is meant by a questioned cost.Ch. 21 - Distinguish between a subrecipient and a primary...Ch. 21 - Prob. 33RQCh. 21 - Prob. 34QRACh. 21 - Steve Ankenbrandt, president of Beeb Corp., has...Ch. 21 - Prob. 36QRACh. 21 - Prob. 37QRACh. 21 - Prob. 38QRACh. 21 - Prob. 39QRACh. 21 - Prob. 40QRACh. 21 - Prob. 41QRACh. 21 - Prob. 42QRACh. 21 - Prob. 43AOQCh. 21 - Prob. 43BOQCh. 21 - Prob. 43COQCh. 21 - Prob. 43DOQCh. 21 - Prob. 43EOQCh. 21 - Prob. 43FOQCh. 21 - Prob. 43GOQCh. 21 - Prob. 43HOQCh. 21 - Prob. 43IOQCh. 21 - Prob. 43JOQCh. 21 - Prob. 43KOQCh. 21 - Prob. 43LOQCh. 21 - Prob. 44OQCh. 21 - Prob. 45OQCh. 21 - Prob. 46PCh. 21 - Devry Corporation has established an independent...Ch. 21 - Prob. 48PCh. 21 - Prob. 49PCh. 21 - Prob. 50ITC
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