Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 22, Problem 22DQP
(a).
To determine
Determine the kind of evidence that can be examined for supporting the beginning balances in the accounts.
(b).
To determine
Determine the evidence to that can be used to support additions to each account.
(c).
To determine
Determine the type of evidence that can be examined to support payments.
(d).
To determine
Determine the procedures that can be performed in relation to the ending balances in the accounts.
(e).
To determine
Determine the evidence that can be used to verify interest rates and due dates.
(f).
To determine
Determine the use of information for audit of interest expense and interest payable accounts.
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Determine the following as a result of your audit:
a. How much of the notes payable is reported in the non-current liabilities section of the statement of financial position as of December 31, 2023?
b. How much is the correct interest expense for the year ended December 31, 2024?
show solution:
You are in charge of auditing PLM (PopoyLangMalakas) Company's investmentaccounts for the year ended December 31, 2021, which was incorporated last March 3, 2020. During the course of the audit, you have obtained the balances and therelated journal entries of its investment related transactions and have revealed thefollowing information:
Question 1: The adjustment to correct the interest income for 2021 includes adebit/(credit) to the interest revenue account amounting to? (Put a negativesign if credit) Question 2: How much is the retroactive adjustment to the beginning balance ofretained earnings for the year 2021, pertaining to the investment in BSP bonds?(Please indicate debit or (credit), use negative sign if credit).Question 3: The correct amount of investment in BSP bonds that should bepresented in the statement of financial position as of December 31, 2021 is?
Ann Marcus, CPA, is performing an audit for one of her clients, Artistcraft Ltd., a glass factory, for its December 31, 2023, year end.
The audit program requires a substantive analytical procedure to be performed on the reasonableness of Artistcraft's interest
expense on its long-term debt.
Ann has identified the following information:
Long-term debt balance confirmed by the bank in prior-year file
Long-term debt balance confirmed by the bank in the current year
Interest rate per the bank confirmation
Balance per the general ledger
Performance materiality
(a)
$1,545,861
$1,427,529
6.25 %
$89,525
$7,000
Which of the following are true with respect to this analytic substantive procedure?
The balances of the long-term debt and the interest rate are taken from bank confirmations which is external, third
party evidence, and therefore highly reliable.
There is no need to need to consider the reliability of the underlying data when using analytical procedures.
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Chapter 22 Solutions
Auditing And Assurance Services
Ch. 22 - List four examples of interest-bearing liability...Ch. 22 - Prob. 2RQCh. 22 - Prob. 3RQCh. 22 - Prob. 4RQCh. 22 - Prob. 5RQCh. 22 - Distinguish between (a) tests of controls and...Ch. 22 - Prob. 7RQCh. 22 - Prob. 8RQCh. 22 - Prob. 9RQCh. 22 - Prob. 10RQ
Ch. 22 - Prob. 11RQCh. 22 - Prob. 12RQCh. 22 - Prob. 13RQCh. 22 - Prob. 14RQCh. 22 - Prob. 15RQCh. 22 - Explain the relationship between the audit of...Ch. 22 - Prob. 17.1MCQCh. 22 - Prob. 17.2MCQCh. 22 - Prob. 17.3MCQCh. 22 - Prob. 18.1MCQCh. 22 - Prob. 18.2MCQCh. 22 - Prob. 18.3MCQCh. 22 - Prob. 19.1MCQCh. 22 - Prob. 19.2MCQCh. 22 - Prob. 19.3MCQCh. 22 - Prob. 20DQPCh. 22 - Prob. 21DQPCh. 22 - Prob. 22DQPCh. 22 - Prob. 23DQPCh. 22 - Prob. 24DQPCh. 22 - Prob. 25DQPCh. 22 - Prob. 26DQPCh. 22 - Prob. 27DQPCh. 22 - Prob. 28DQPCh. 22 - Prob. 29DQPCh. 22 - Prob. 30DQP
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