2. What is the revenue-recognition abuse identified in the article related to the percentage-of-completionmethod?3. Did revenue-recognition abuses tend to increase or decrease net income in the year they occurred?4. Did auditors tend to require their clients to make adjustments that reduced the revenue-recognition abusesthey detected?

Q: You have performed preliminary analytical procedures on one of your audit engagements and observed…

A: The balance sheet includes the assets, liabilities, and stockholders' equity of the company.

Q: After a while, Brekdak as head of the Accounting Department, realized that the system of record that…

A: The answer for the above practical question on consistency in applying policies and procedures for…

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A: Audit risks are mainly of three types: Inherent risk which is derived from the characteristics of…

Q: Assume that your firm was auditing General Electric in 2000 and was recommending an adjustment to…

A: Given case is: Assume that your firm was auditing General Electric in 2000 and was recommending an…

Q: When it is impossible to determine whether a change is a change in estimate or a change in policy,…

A: As per relevant accounting rules, accounting policy refers to the type of valuation or method a…

Q: Comment on the extent to which results from a negative confirmation may be relied upon to verify the…

A: Ans. Positive confirmation is an auditing enquiry that requires the customer to confirm the accuracy…

Q: Accountants very often are required to make estimates, and very often those estimates prove…

A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…

Q: An auditor is skeptical about the assertion on the salary expenses. He collected information on the…

A: An audit can be defined as an inspection of books of accounts of a company to check whether the…

Q: When it is difficult to distinguish between a change of estimate and a change in accounting policy,…

A: Answer : (a) Treat the entire change as a change in  estimate with appropriate  disclosure.

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A: ISA 560 Subsequent events allow the auditor to reconsider his audit report if any subsequent event…

Q: As a result of analytical procedures, the auditor determines that the gross profitpercentage has…

A: Option 4 is correct.

Q: Reports on Internal Control over Financial Reporting (Report Modifications). Foreach of the…

A: Definition: Internal Control: Internal control refers to the plan of a company. Implementation of an…

Q: Changing the aging account receivable to a fixed rate at the end of the fiscal year looks good for…

A: Audit refers to the examination of the financial statements of an entity in order to express a…

Q: Which of the following types of audit evidence provides the least assurance of reliability?

A: Answer:   Option B

Q: If an auditor assigns a tolerable misstatement of $1,000 to accounts payable, he or she would need…

A: Audit: It is a systematic examination of books of accounts of an individual or a firm. It is done by…

Q: least likely to be your starting point in computing materiality

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Q: Rationalization for fraud can fall under two categories: “no harm” and “no responsibility.” Assume…

A: Rationalization: Rationalization emphasizes on the justification provided by an employee and finds…

Q: gement. Requirement: 1.Discuss the differences between the modified and unmodified audit…

A: 1. DIFFERENCE BETWEEN MODIFIED & UNMODIFIED AUDIT REPORTS DEFINITION:- An auditor gives an…

Q: The PCAOB issues audit practice alerts to highlight new, emerging, or otherwise noteworthy…

A: The on-site verification activity of a process or quality system, such as inspection or examination,…

Q: ons for the increases in the number of

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Q: To correct all errors they discover in the accounting records for the year under audit. The auditors…

A: The auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about…

Q: If a client uses ADP, a service center, for processing payroll, None of these. auditing standards…

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Q: Why are auditors interested in substantial investment losses occurring early in the following…

A: The objective of auditors for performing an audit engagement is to give audit opinion in the…

Q: A client uses percentages of aging categories to calculate the allowance for doubtful accounts.…

A: The business entities are required to audit their financial statements so as to know whether the…

Q: Consider the following independent and material situations: (i) The client, with reasonable…

A: Audit Opinion Auditors are issue four types Audit opinion.  The details are given below Unmodified…

Q: 1. B) During the audit of LDF Co’s bad debt provision, the auditor discovered that £500,000 of costs…

A: Part 1: Modified audit reports: It applies to a report in which the financial records are accurate…

Q: During a consulting engagement involving the development of a new accounts payable system, an…

A: The auditor reviewing the disbursements process should do which of the following? Answer - Report…

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A: Definition: Earnings: The bottom line of an income statement which is the result of excess earnings…

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A: The customer has a legal obligation to repay the loan, accounts receivable are reported as assets on…

Q: During the audit of LDF Co’s bad debt provision, the auditor discovered that £500,000 of costs…

A: Audit is defined as the examination of the different books of accounts through auditor followed by…

Q: The client has changed from double declining balance to straight line depreciation for its…

A: An audit is the verification of the materiality of the financial statements of a corporation. In an…

Q: Kim Company, a CPA firm, conducted an audit for the 2020 financial statements of Erin Corporation.…

A: Management fraud can be defined as the act or omission by management leading to intentional fraud…

Q: f In addition to the risk factor identified in the preceding question, another risk factor relating…

A: The question is based on the concept of Financial Accounting.

Q: An internal auditor plans to use an analytical review to verify the correctness of various operating…

A: When there is fraud in the account, the would not show a correct view.

Q: How can adjustments to the standardized financial statements be made in order to undo these…

A: Accounting distortions are differences between the data shown in financial statements and actual…

Q: The CPA firm auditing Mason Street Recording Studiosfound that total stockholders’ equity was…

A:

Q: Which of the following is NOT a reason the auditor performs some substantive procedures at an…

A: solution interim audit                 An auditor may choose to perform the audit before the end of…

Q: What are some errors and frauds that can occur in the revenue cycle

A: Introduction:- The revenue cycle is used to completion of an accounting process for recording…

Q: Design adequate audit procedures that Mr. Younus will use related to vouchers and payments. also…

A: Audit procedures are the procedures that are used to check or authenticate whether the transactions…

Q: You are reviewing the results of the Firestone audit. These are the details of the summay of…

A: Performance Materiality describes the level of materiality set by the auditor to reduce to an…

Q: A CPA is performing review services for a small, closely held manufacturing company.As a part of the…

A: Auditing: Auditing is an independent examination of financial statements. The set of financial…

Q: In considering overáll believes that misstatements aggregating $50,000 would have a material effect…

A: To establish a level of materiality, auditors rely on rules of thumb and professional judgment. They…

Q: B. During the audit of LDF Co's bad debt provision, the auditor discovered that £500,000 of costs…

A: SOLUTION- 1-DIFFERENCE BETWEEN UNMODIFIED AND MODIFIED AUDIT REPORT-   UNMODIFIED REPORT MEANS THAT…

Q: As a result of analytical procedures an auditor determines that gross profit has declined from 30%…

A: The auditor's duty is to identify the fraud and errors in the financial statement of the company. If…

Q: Question 1 Which of the following is not true about the review of historical financial statements?…

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Q: After a while, Brekdak as head of the Accounting Department, realized that the system of record that…

A: Accounting standards are the rules or policies, required to be followed by public companies in…

Q: Below are ten independent risk factors:1. The client lacks sufficient working capital to continue…

A: 1. The first risk factor of client lack of working capital is related to Acceptable audit risk. 2.…