Why does inventory represent one of the more complex parts of the audit? There are also issues such as obsolescence
and lower of cost or market that affect the valuation of inventory. The complexity of auditing inventory may also be
affected by the d
Briefly describe each of the following documents or records: payroll register, payroll master file, and payroll
master file changes report. Payroll register: Document that summarizes all payroll payments issued to employees
(usually indicates employe
Define what is meant by contingent liability. What three categories are used to classify a contingent liability?
Give four examples of a contingent liability. Contingent liability is a situation or condition that involves
possible loss but there is t
Briefly summarize management's and the auditor's basic responsibilities under Section 404 of the SarbanesOxley Act of 2002. Management and Auditors have the following responsibilities under Section 404. Accept
responsibility for the effectiveness of t
What entities are involved in establishing standards and rules for the professional conduct of public
accountants? Who establishes such standards for auditors of public versus private companies?
What are the two major sections of the Code of Pro
Non-Stat Sampling Problem
You have been assigned to determine if the stated value of inventory is within tolerable
limits. We show a ledger balance of $1,725,882 which contains 1,734 records. We wish
to limit audit risk with a tolerable misstatement amoun
MUS Sampling Problem D
You have been assigned to determine if the stated value of accounts receivable is within
tolerable limits. We show a ledger balance of $1,300,000 which contains 654 accounts.
We wish to limit audit risk to 10% with a tolerable misst
Distinguish between accounting changes that affect consistency and changes that do not. To what does the word consistency refer?
How is it possible for an accounting change to affect comparability but not consistency? Changes affecting consistency ar
Briefly describe each of the following documents or records: purchase requisition, purchase order, receiving report,
vendor invoice, and voucher. Why would an entity combine all documents related to a purchase transaction into a
voucher packet? Purch
Describe the credit function's duties for monitoring customer payments and handling bad debts. The final approval for
writing off an account should come from an office of the company who is not responsible for credit or collections. The