Recorded amount of entries in the acquisition journal audit 1-8-9

Recorded amount of entries in the acquisition journal audit 1-8-9

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A- Recorded amount of entries in the acquisition journal Documentation--consists of the client's business documents used to support accounting events. The strength of documentation is that it is prevalent and available at a low cost. Documents can be internal or externally generated. Internal documents provide less reliable evidence than external ones, particularly if the client's internal control is suspect. Documents that are external and have been prepared by qualified individuals such as attorneys or insurance brokers provide additional reliability. The use of documentation in support of a client's transactions is called vouching. It is important to note that electronic records are considered valid documents, per SAS 80. Reperformance (rechecking) of samples of computations or information made by the client B-Physical existence of inventory 1. Physical examination--of a tangible asset such as inventory, cash, or fixed assets. Your text points out that some items, such as checks, are assets only during that period when they have inherent value; prior to execution and after cashing, checks are classified as documents. Physical examination is a way to verify that an asset exists, or to verify its condition, but not to determine whether the client owns the asset. 2. Confirmation--is the receipt of a written or oral response from and independent third party verifying information requested by the auditor. Because of the independence of the third party, confirmations are a highly desirable, though costly, type of evidence. SAS 67 (AU 330) describes two types of confirmations. A positive confirmation asks the respondent to provide an answer in all circumstances, while a negative confirmation asks for a response only if the information is incorrect. As you might predict, negative confirmations are not as competent as positive confirmations. Note that SAS 67 requires confirmation of a sample of accounts receivable due to the materiality of receivables for most companies. Some typical types of information that auditors confirm are listed in Table 7-3. Note the proviso that confirmations must be under the control of the auditor for maximum reliability of the evidence. B- Accuracy of accounts receivables 1. Reperformance (rechecking) of samples of computations or information made by the client
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2. Confirmation--is the receipt of a written or oral response from and independent third party verifying information requested by the auditor. Because of the independence of the third party, confirmations are a highly desirable, though costly, type of evidence. SAS 67 (AU 330) describes two types of confirmations. A positive confirmation asks the
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This note was uploaded on 02/02/2012 for the course ACCOUNTING Acc632 taught by Professor Marry during the Spring '10 term at College of the Bahamas.

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Recorded amount of entries in the acquisition journal audit 1-8-9

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