NOVEMBER 1995. #2, PARTS 91-105 - QUESTION Number 2 (Estimated time-15 to 25 minutes) Page 1 of 2 Required: Items 91 through 105 represent a series of unrelated statements, questions, excerpts, and comments taken. from various parts of an auditor's working paper file. Below the items is a list of the likely sources of the statements, questions, excerpts, and comments. Select, as the best answer for each item, the most likely source. Select only one source for each item. A source may be selected once, more than once, or not at all. I - CONTINUED -
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- how do auditor gather audit evidence during the period of covid 19 ? 700 words60 days after the date of the auditor's report is ordinarily an appropriate time limit within which to complete the assembly of the final audit file. True False5. Which of these is the set of working papers that affect the current year and future audits? Select one:a. Permanent fileb. Current filec. Update filed. Carryover file
- Assume that items 1–8 are situations that Blas, CPA, has encountered during his audit of GELAY, Inc., a private company. List A represents the types of opinions the auditor ordinarily would issue, and List B represents a portion of the needed report modifications — whether an additional paragraph will be included. For each situation, select one response from List A and one (1) from List B. Select the best answers for each item the action the auditor would normally take. The types of opinions in List A and the report modifications in List B may be selected once, more than once, or not at all. Assume the following: The auditor is The auditor previously expressed an unmodified opinion on the prior year’s financial Only single-year (not comparative) statements are presented for the current The conditions for an unmodified opinion exist unless contradicted by the The conditions stated in the items to be answered are material, unless otherwise Each item to be answered is independent of the…McMullen and Milligan, CPAs, were conducting the audit of Cusick Machine Tool Company for the year ended December 31. Jim Sigmund, senior-in-charge of th audit, plans to use MUS to audit Cusick's invenotry account. Thee balance at December 31 was $9,000,000. Required: A) Based on the following information, compute the required MUS sample size: Tolerable misstatement = $360,000 Expected misstatement = $90,000 Risk of incorrect acceptance = 5% B) Nancy Van Pelt, staff accountant, used the sample items selected in part (a) and performed the audit procedures listed in the inventory audit program. She notes the following misstatements: Misstatement Number Book Value Audit Value 1 $10,000 $7,500 2 $9,000 $6,000 3 $60,000 0…McMullen and Milligan, CPAs, were conducting the audit of Cusick Machine Tool Company for the year ended December 31. Jim Sigmund, senior-in-charge of th audit, plans to use MUS to audit Cusick's invenotry account. Thee balance at December 31 was $9,000,000. Required: A) Based on the following information, compute the required MUS sample size: Tolerable misstatement = $360,000 Expected misstatement = $90,000 Risk of incorrect acceptance = 5% B) Nancy Van Pelt, staff accountant, used the sample items selected in part (a) and performed the audit procedures listed in the inventory audit program. She notes the following misstatements: Misstatement Number Book Value Audit Value 1 $10,000 $7,500 2 $9,000 $6,000 3 $60,000 0…
- Assume that items 1–8 are situations that Blas, CPA, has encountered during his audit of GELAY, Inc., a private company. List A represents the types of opinions the auditor ordinarily would issue, and List B represents a portion of the needed report modifications — whether an additional paragraph will be included. For each situation, select one response from List A and one (1) from List B. Select the best answers for each item the action the auditor would normally The types of opinions in List A and the report modifications in List B may be selected once, more than once, or not at all. Assume the following: The auditor is independent The auditor previously expressed an unmodified opinion on the prior year’s financial Only single-year (not comparative) statements are presented for the current The conditions for an unmodified opinion exist unless contradicted by the The conditions stated in the items to be answered are material, unless otherwise Each item to be answered is…You have been assigned to the first audit of the Chicago Companyfor the year ending March 31, 2013. Accounts receivable were confirmed on December 31,2012, and at that date the receivables consisted of approximately 200 accounts withbalances totaling $956,750. Fifty of these accounts with balances totaling $650,725 wereselected for confirmation. All but 10 of the confirmation requests have been returned; 24were returned without any exceptions, 6 had minor differences that have been clearedsatisfactorily, and 10 confirmations had the following information and comments:1. We are sorry, but we cannot answer your request for confirmation of our accountas the PDQ Company uses an accounts payable voucher system and can onlyconfirm individual invoices.2. The balance of $1,050 was paid on December 28, 2012.3. The balance of $7,750 was paid on January 5, 2013.4. The balance of $2,975 was paid on December 13, 2012.5. We do not owe you anything at December 31, 2012, as the goods, represented…Assume that a continuing audit client has recorded Accounts Receivable and Equipment both in the amount of $1,000,000. In a typical audit, which account would take more time to audit?
- Consider each of the following independent and material situations. In each case: the balance date is 31 October 20X7. the fieldwork was completed on 5 December 20X7. the financial report and audit report were signed on 12 December 20X7. the financial report and audit report were mailed to the members on 20 December 20X7. Required: For each of the above events (i) to (iv), state the appropriate action (A) to (D) that the auditor would require in order to issue an unqualified opinion for the situation and justify your response. The alternative actions are as follows: (A) Client to adjust the 31 October 20X7 financial report. (B) Client to disclose the information in the notes to the 31 October 20X7 financial report. (C) Client to recall the 31 October 20X7 financial report for revision. (D) No action is required. 1. Your client, Outback Mining, owns a mineral exploration licence in Central Australia. At 31 October this licence was valued by an independent…The internal auditors of Tantacle Electrical Company report to the controller. Because ofchanges made in the past year to several of the transaction processing programs, the internalauditors created a new test data set. The external auditors requested that the old date set alsobe run. The internal auditors, embarrassed, explained that they overwrote the original testdata set.Required:Outline any potential risks and determine the courses of action the external auditor shouldtake._____ means the application of audit procedures to less than 100% of the items within an account balance or class of transactions to enable the auditor to obtain and evaluate audit evidence. a. Inspection b. Observation c. Audit sampling d. Analytical Procedure