Mr. Ali appointed as an auditor for the final audit of the Mazoon retail corporation for the year 2018, Oman. Mazoon retail corporation manufactures kids toy at lower cost. While performing the audit of the financial statement Mr. Ali have identified several information. Those are: 1. The total purchases of the company is recorded OMR 150,000. In that cash purchases OMR 50,000 and credit purchases are OMR 100,000. 2. the labour used for the production and marketing purposes are outsourced by the company. The total amount paid to the outsource company for utilizing the labour is OMR 95,000. 3. In the year 2018 company has achieved OMR 450,000 sales. Mr. James found that almost 70% of the sales are credit basis. 4. In the year 2018 the company has recorded the bad debts of OMR 5,000. 5. The company recorded OMR 2000 worth of the inventory are damaged and lost in transit Required: List and explain the types/methods of audit evidence gathered by Mr. Ali and comment on the persuasiveness (Reliability) of each type.

Mr. Ali appointed as an auditor for the final audit of the Mazoon retail corporation for the year 2018, Oman. Mazoon retail corporation manufactures kids toy at lower cost. While performing the audit of the financial statement Mr. Ali have identified several information. Those are: 1. The total purchases of the company is recorded OMR 150,000. In that cash purchases OMR 50,000 and credit purchases are OMR 100,000. 2. the labour used for the production and marketing purposes are outsourced by the company. The total amount paid to the outsource company for utilizing the labour is OMR 95,000. 3. In the year 2018 company has achieved OMR 450,000 sales. Mr. James found that almost 70% of the sales are credit basis. 4. In the year 2018 the company has recorded the bad debts of OMR 5,000. 5. The company recorded OMR 2000 worth of the inventory are damaged and lost in transit Required: List and explain the types/methods of audit evidence gathered by Mr. Ali and comment on the persuasiveness (Reliability) of each type.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

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

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

Chapter4: Professional Liability, Auditor Judgment Frameworks, And Professional Responsibilities

Section: Chapter Questions

Problem 54RSCQ

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