Part 4 Answer Key - Keystone Computers & Networks, Inc....

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Total Likely Misstatement December 31, 20X5 Overstatement (Understatement) W/P ref. Current Assets Noncurrent Assets Current Liabilities Noncurr ent Liabiliti es Owners' Equity Inc. Before Taxes Tax Expense Uncorrected Known Misstatements 1. Unrecorded liabilities (6,440) 1,610 6,440 (1,610) 6,440 1,610 Projected Misstatements 2. Understatement of accounts receivable (confirmation results) (2,042) (511) (2,042) 511 (2,042) (511) 3. Overstatement of inventory (price tests) 9,510 2,378 9,510 (2,378) 9,510 2,378 Other Estimated Misstatements 4. Understatement of allowance for uncollectible accounts 5,000 1,250 5,000 (1,250) 5,000 1,250 Total Likely Misstatements $12,468 ------- ($ 1,713) -------- $ 14,181 $18,908 $ 4,727 Amount Considered Material $50,000 $75,000 $ 50,000 $75,000 $100,000 $65,000 ---------- b. The amount of total likely misstatements is low enough to result in a sufficiently low level of audit risk to justify our opinion.
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Chapter 14 Appendices Audit Case Exercises 14A-1 a. Control
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This note was uploaded on 04/08/2010 for the course ACCT 455 taught by Professor Schwartz during the Spring '10 term at Binghamton University.

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Part 4 Answer Key - Keystone Computers & Networks, Inc....

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