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group 2 answers

group 2 answers - 1 T racing is one of two processes used...

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1. Tracing is one of two processes used by accountants to verify transactions used during an audit. AN auditor takes an item of original data and tracks it forward to ensure that it has been properly recorded throughout the bookkeeping process. An example: You sold 1,000 copies of a software program to a distributor. The accountant would check the sales ledger to make sure it matched the original invoice (date, price, quantity and distributor’s name). Then the accountant would just verify each step until it leaves the warehouse. Tracing is a completeness test. It detects inappropriate exclusion. Another example of when tracing is used is when looking for fraud within the company. 2. An opinion is a statement of how true a company’s financial statements stack up against how they claim they do. There are four different opinions; Unqualified Opinion, Qualified Opinion, Adverse Opinion and Disclaimer of Opinion. “ When a disclaimer of opinion is issued it is when the auditor does not have enough information to form an opinion. If the auditor knows that the statements are inaccurate, she cannot hide behind a disclaimer of opinion; she must issue an adverse opinion.” ( Text p921) An adverse opinion is, in the auditor’s view, the company’s financial statements do not accurately reflect its financial position—the company is lying about
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  • Fall '10
  • Shubin
  • adverse opinion, term partnership, Partner violates partnership, Oregon Steel Mills, term partnership withdraws

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group 2 answers - 1 T racing is one of two processes used...

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