Answered: What are the major differences between…

What are the major differences between the audit of prepaid expensesand other asset accounts such as accounts receivable or property, plant, and equipment?

Business/Professional Ethics Directors/Executives/Acct

8th Edition

ISBN:9781337485913

Author:BROOKS

Publisher:BROOKS

Chapter5: Corporate Ethical Governance & Accountabililty

Section: Chapter Questions

Problem 18.6EC

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Concept explainers

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.

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What are the major differences between the audit of prepaid expenses
and other asset accounts such as accounts receivable or property, plant, and equipment?

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Audit procedures for items of Financial Statement

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Similar questions

How will the approach for verifying repair expense differfrom that used to audit depreciation expense? Why will the approach be different?
What assertions found in PP&E, investments, and intangibles accounts are of interest to an auditor during the examination of the expenditure and acquisition cycle?
How do audit procedures for prepaid expenses and accrued liabilities also provide audit evidence about related expense accounts?
In auditing depreciation expense, what major considerationsshould the auditor keep in mind? Explain how each can be verified
What is the relationship between the audit of property, plant, andequipment accounts and the audit of repair and maintenance accounts? Explain how theauditor organizes the audit to take this relationship into consideration.
Explain the process of auditing the following transactions/accounts for a Mining. • Accounts Receivable• Contract guarantees and cancellation or postponement provisions.• Contract costs• Income recognitionb.
When auditing the existence assertion for an asset, auditors proceed from thea. Financial statement amounts back to the potentially unrecorded items.b. Potentially unrecorded items forward to the financial statement amounts.c. General ledger back to the supporting original transaction documents.d. Supporting original transaction documents to the general ledger.
explain the process of auditing the followingtransactions/accounts below. • Inventories• Property, plant, and equipment (PPE)• Renewal and reconditioning costs• Revenues• Rehabilitation bonds
Determine the audited balance of Depreciation expense under the accrual basis: * Determine the audited balance of Net income under the accrual basis: *
Which documents would an auditor most likely choose to examine closely to ascertain that all expenditures incurred during the accounting period have been recorded as a liability?a. invoices b. purchase orders c. purchase requisitions d. receiving reports
Describe the purpose and give examples of audit procedures in the search for unrecorded liabilities.
What are specific audit objectives? Explain their relationship to the general audit objectives. Identify the management assertion and general balance-related audit objective for the specific balance-related audit objective: All recorded fixed assets exist at the balance sheet date. Identify the management assertion and presentation and disclosure-related audit objective for the specific presentation and disclosure-related audit objective: Read the fixed asset footnote disclosure to determine that the types of fixed assets, depreciation methods, and useful lives are clearly disclosed.