3air_im14 - 76 CHAPTER 14 Completing the Audit LEARNING...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
76 CHAPTER 14 Completing the Audit LEARNING OBJECTIVES Review Checkpoints Exercises and Problems Cases 1. Describe the related balance sheet account group where the audit of the major revenue and expense accounts normally is associated. 1, 3 2. Describe the use of analytical procedures to audit revenue and expense accounts. 2, 3, 4 3. Explain the use of the client representation letter and the attorney's letter as an audit is completed. 5, 6, 7, 8, 9 36, 37 48 4. Describe the reasons written client representations are obtained and list the four items that are included without regard to a materiality criterion. 5 36, 37, 38 24 5. Given a set of facts and circumstances, classify a subsequent event by type and describe the proper treatment in the financial statements. 10, 11, 12, 13 39, 40, 41, 42, 43 49 6. Specify the sequence of decisions and actions auditors must consider upon discovery (after the issuance of the report) of information about facts that may have existed at the date of the auditor's report. 14, 15 44 7. Specify the considerations and procedures applied by auditors upon concluding (after the audit report date) that one or more auditing procedures were omitted. 16 45 8. Explain the final audit steps involving adjusting entries, second-partner review, and the management letter. 17, 18, 19, 20, 21, 22, 23 46 26, 47 POWERPOINT SLIDES PowerPoint slides are included on the website. Please take special note of:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
77 * Analytical Procedures * Summary of Audit Correspondence * Subsequent Events SOLUTIONS FOR REVIEW CHECKPOINTS 14.1 Revenue and Expense Accounts Lease revenue Lease revenue Fixed assets and receivables Franchise revenue Receivables and intangibles Royalty and license revenue Receivables and investments Repair and maintenance Fixed assets and liabilities Interest expense Liabilities 14.2 Many of the revenue and expense accounts are not material in relation to the financial statements and may be combined with other accounts in the financial statements. These accounts can be audited through analytical procedures. Such procedures compare the account balance to related balance sheet accounts, to sales, to industry averages or to a multiple-year trend to ascertain whether any unusual fluctuations are present. Unusual or unexpected items would have to be investigated and material items vouched to supporting documents. 14.3 "Unusual revenue transactions" can cause significant audit evidence and reporting problems when such transactions are designed by management to create inappropriate earnings. These transactions pose a combination of: evidence-gathering problems, auditor responsibility for detecting errors and irregularities, and reporting-disclosure problems.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/08/2012 for the course IAF IAF520 taught by Professor Aldcorn during the Winter '08 term at Seneca.

Page1 / 33

3air_im14 - 76 CHAPTER 14 Completing the Audit LEARNING...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online