17-36 Roscoe & Jones, Ltd., a CPA firm in Silver Bell, Arizona, has completed the audit of the financial statements of Excelsior Corporation as of, and for, the year ended December 31, 20XI Findings related to the financial statements and the audit include Although Excelsior has been in existence for a number of years and been audited for the past seven years by Roscoe & Jones, it is presenting only current-year financial statements Roscoe was unable to perform normal accounts receivable confirmation procedures, but alternate procedures were used to satisfy Roscoe as to the validity of the receivables Excelsior Corporation is the defendant in litigation, the outcome of which is highly uncertain. If the case is settled in favor of the plaintiff, Excelsior will be required to pay a substantial amount of cash that might require the sale of certain assets. The litigation and the possible effects have been properly disclosed in Note 11 Roscoe wishes to include discussion of this matter in the audit report During 20X1 Excelsior changed its method of accounting for long-term construction contracts and properly reflected the effect of the change. Roscoe is satisfied with Excelsior's justification for making the change. The change is discussed in Note 12 Excelsior issued debentures on January 31, 20X1, in the amount of $10 million. The funds obtained from the issuance were used to finance the expansion of plant facilities. The debenture agreement restricts the payment of future cash dividends to earnings after December 31, 20XI. Excelsior declined to disclose these data in the notes to the financial statements. Roscoe considers this a material but not pervasive omission Roscoe gathered sufficient appropriate audit evidence as of February 10, 20X2, and planned a report release date of February 16, 20X2 Consider all facts given and prepare an auditors' report in an acceptable and complete format, incorporating any necessary departures from the standard report 317-36.Roscoe & Jones, Ltd., a CPA firm in Silver Bell, Arizona, hascompleted the audit of the financial statements of ExcelsiorCorporation as of, and for, the year ended December 31, 20X1.Findings related to the financial statements and the audit includeAlthough Excelsior has been in existence for a number of yearsand been audited for the past seven years by Roscoe & Jones, it ispresenting only current-year financial statements.Roscoe was unable to perform normal accounts receivableconfirmation procedures, but alternate procedures were used tosatisfy Roscoe as to the validity of the receivables.Excelsior Corporation is the defendant in litigation, the outcomeof which is highly uncertain. If the case is settled in favor of theplaintiff, Excelsior will be required to pay a substantial amount ofcash that might require the sale of certain assets. The litigationand the possible effects have been properly disclosed in Note 11.Roscoe wishes to include discussion of this matter in the auditreport.During 20X1 Excelsior changed its method of accounting forlong-term construction contracts and properly reflected the effectof the change. Roscoe is satisfied with Excelsior's justificationfor making the change. The change is discussed in Note 12.Excelsior issued debentures on January 31, 20X1, in the amountof $10 million. The funds obtained from the issuance were usedto finance the expansion of plant facilities. The debentureagreement restricts the payment of future cash dividends toearnings after December 31, 20X1. Excelsior declined to disclosethese data in the notes to the financial statements. Roscoeconsiders this a material but not pervasive omission.Roscoe gathered sufficient appropriate audit evidence as ofFebruary 10, 20X2, and planned a report release date of February16, 20X2.Consider all facts given and prepare an auditors' report in anacceptable and complete format, incorporating any necessarydepartures from the standard report.

A CPA is a certified public accountant, who is someone who has earned a professional designation…

Answered: 17-36 Roscoe & Jones, Ltd., a CPA firm…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle

Section: Chapter Questions

Problem 38RQSC

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17-36 Roscoe & Jones, Ltd., a CPA firm in Silver Bell, Arizona, has completed the audit of the financial statements of Excelsior Corporation as of, and for, the year ended December 31, 20XI Findings related to the financial statements and the audit include Although Excelsior has been in existence for a number of years and been audited for the past seven years by Roscoe & Jones, it is presenting only current-year financial statements Roscoe was unable to perform normal accounts receivable confirmation procedures, but alternate procedures were used to satisfy Roscoe as to the validity of the receivables Excelsior Corporation is the defendant in litigation, the outcome of which is highly uncertain. If the case is settled in favor of the plaintiff, Excelsior will be required to pay a substantial amount of cash that might require the sale of certain assets. The litigation and the possible effects have been properly disclosed in Note 11 Roscoe wishes to include discussion of this matter in the audit report During 20X1 Excelsior changed its method of accounting for long-term construction contracts and properly reflected the effect of the change. Roscoe is satisfied with Excelsior's justification for making the change. The change is discussed in Note 12 Excelsior issued debentures on January 31, 20X1, in the amount of $10 million. The funds obtained from the issuance were used to finance the expansion of plant facilities. The debenture agreement restricts the payment of future cash dividends to earnings after December 31, 20XI. Excelsior declined to disclose these data in the notes to the financial statements. Roscoe considers this a material but not pervasive omission Roscoe gathered sufficient appropriate audit evidence as of February 10, 20X2, and planned a report release date of February 16, 20X2 Consider all facts given and prepare an auditors' report in an acceptable and complete format, incorporating any necessary departures from the standard report

3
17-36.
Roscoe & Jones, Ltd., a CPA firm in Silver Bell, Arizona, has
completed the audit of the financial statements of Excelsior
Corporation as of, and for, the year ended December 31, 20X1.
Findings related to the financial statements and the audit include
Although Excelsior has been in existence for a number of years
and been audited for the past seven years by Roscoe & Jones, it is
presenting only current-year financial statements.
Roscoe was unable to perform normal accounts receivable
confirmation procedures, but alternate procedures were used to
satisfy Roscoe as to the validity of the receivables.
Excelsior Corporation is the defendant in litigation, the outcome
of which is highly uncertain. If the case is settled in favor of the
plaintiff, Excelsior will be required to pay a substantial amount of
cash that might require the sale of certain assets. The litigation
and the possible effects have been properly disclosed in Note 11.
Roscoe wishes to include discussion of this matter in the audit
report.
During 20X1 Excelsior changed its method of accounting for
long-term construction contracts and properly reflected the effect
of the change. Roscoe is satisfied with Excelsior's justification
for making the change. The change is discussed in Note 12.
Excelsior issued debentures on January 31, 20X1, in the amount
of $10 million. The funds obtained from the issuance were used
to finance the expansion of plant facilities. The debenture
agreement restricts the payment of future cash dividends to
earnings after December 31, 20X1. Excelsior declined to disclose
these data in the notes to the financial statements. Roscoe
considers this a material but not pervasive omission.
Roscoe gathered sufficient appropriate audit evidence as of
February 10, 20X2, and planned a report release date of February
16, 20X2.
Consider all facts given and prepare an auditors' report in an
acceptable and complete format, incorporating any necessary
departures from the standard report.

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