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us_10_6c_care_for_kids_072310 - The portfolio which...

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Case 10-6 Care For Kids Inc. You are the senior manager or audit engagement partner on Care For Kids Inc., a not-for-profit organization that has a December 31 year-end. While performing year-end substantive procedures, the engagement team identified an error in the entity’s year-end adjusting entries. Care For Kids Inc. had inadvertently not recorded an unrealized gain of $5 million in one of its many investment portfolios. The investments total approximately $200 million. Through inquiry of client management, the engagement team learned that the accounting department had not reviewed the broker’s statement for this particular portfolio.
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Unformatted text preview: The portfolio, which consisted of traded securities, had increased in market value by $5 million. Materiality for the audit was $10 million. As part of the audit, you must assess the operating effectiveness of controls related to the misstatement. Required: • What factors would you consider to determine if a deficiency, significant deficiency, or material weakness exists? • What additional information, if any, is needed to complete your assessment? • What, if any, communications would you be required to make to those charged with governance? Copyright 2009 Deloitte Development LLC All Rights Reserved....
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  • Spring '10
  • RobertJ.Ramsay
  • engagement team, Year-end adjusting entries, audit engagement partner, Care For Kids Inc., year-end substantive procedures

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