Connect Access Card for Principles of Auditing & Other Assurance Services
21st Edition
ISBN: 9781260299366
Author: Ray Whittington, Kurt Pany
Publisher: McGraw-Hill Education
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Chapter 16, Problem 43P
To determine
Draft a proposed
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Rita King, your staff assistant on the April 30, 20X2, audit of Maxwell Company, was transferred to another assignment before she could prepare the proposed adjusting journal entry for Maxwell's Miscellaneous Revenue account, which she had analyzed per the working paper given below. You have reviewed the working paper and are satisfied with King's procedures. You are convinced that all the miscellaneous revenue items should be transferred to other accounts. Maxwell Company's state of incorporation has an Unclaimed Properties Law.
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You have been assigned responsibility for reviewing the statutory records of Down Limited. Jane Powers (‘Jane’), your Company Secretarial Assistant, is assisting you in this task and her review reveals the mattersbelow:a) Jane cannot find in the statutory books evidence that statutory accounts have been filed with the Registrar of Companies over the last two years. She has asked how this can be checked without reference to Down Limited’s statutory records and what the ramifications are if it is confirmed that no accounts have been filed for this period.b) Jane discovers a company seal in the name of Out Limited, which was the previous name of Down Limited. The seal has not been used since the company changed its name to Down Limited.
For each separate case, state whether the action or situation shows a violation of the AICPACode of Professional Conduct; if so, explain why and cite the relevant rule or interpretation.a. Your client, Contrary Corporation, is very upset over the fact that your audit last yearfailed to detect an $800,000 inventory overstatement caused by employee theft and falsification of the records. The board discussed the matter and authorized its attorneys toexplore the possibility of a lawsuit for damages.b. Contrary Corporation filed a lawsuit alleging negligent audit work, seeking $1 million indamages.c. In response to the lawsuit by Contrary, you decided to bring litigation against certain officers of the company alleging management fraud and deceit. You are asking for a damagejudgment of $500,000.d. The Allright Insurance Company paid Contrary Corporation $700,000 under a fidelitybond covering an inventory theft by employees. Allright is suing your public accountingfirm for damages on the…
Chapter 16 Solutions
Connect Access Card for Principles of Auditing & Other Assurance Services
Ch. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Identify three items often misclassified as...Ch. 16 - Prob. 4RQCh. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - What safeguards should be employed when the...
Ch. 16 - You are asked by a client to outline the...Ch. 16 - Prob. 12RQCh. 16 - Prob. 13RQCh. 16 - Prob. 14RQCh. 16 - Prob. 15RQCh. 16 - What are loss contingencies? How are such items...Ch. 16 - Prob. 17RQCh. 16 - Prob. 18RQCh. 16 - Prob. 19RQCh. 16 - What is the meaning of the term commitment? Give...Ch. 16 - Prob. 21RQCh. 16 - What are subsequent events?Ch. 16 - Describe the manner in which the auditors evaluate...Ch. 16 - Prob. 24RQCh. 16 - Prob. 25RQCh. 16 - Prob. 26RQCh. 16 - In your audit of the financial statements of Wolfe...Ch. 16 - Prob. 28QRACh. 16 - Prob. 29QRACh. 16 - Prob. 30QRACh. 16 - Prob. 31QRACh. 16 - The auditors opinion on the fairness of financial...Ch. 16 - Prob. 33QRACh. 16 - Prob. 34QRACh. 16 - Prob. 35QRACh. 16 - Prob. 36QRACh. 16 - Prob. 37AOQCh. 16 - Prob. 37BOQCh. 16 - Prob. 37COQCh. 16 - When auditing the statement of cash flows, which...Ch. 16 - The search for unrecorded liabilities for a public...Ch. 16 - The aggregated misstatement in the financial...Ch. 16 - Prob. 37GOQCh. 16 - Prob. 37HOQCh. 16 - Prob. 37IOQCh. 16 - Prob. 37JOQCh. 16 - Prob. 37KOQCh. 16 - Which of the following events occurring on January...Ch. 16 - Prob. 38OQCh. 16 - Prob. 39OQCh. 16 - Prob. 40OQCh. 16 - Match the following terms to the appropriate...Ch. 16 - Prob. 42OQCh. 16 - Prob. 43PCh. 16 - Prob. 44PCh. 16 - Prob. 45PCh. 16 - Prob. 46PCh. 16 - Prob. 47PCh. 16 - Prob. 48PCh. 16 - The audit staff of Adams, Barnes Co. (ABC), CPAs,...Ch. 16 - Prob. 50RDC
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