Auditing and Assurance Services (16th Edition)
16th Edition
ISBN: 9780134065823
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Chapter 20, Problem 23DQP
a.
To determine
State whether the
b.
To determine
Identify the related audit objective the procedure will satisfy.
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) The following audit procedures are typical of thosefound in auditing the payroll and personnel cycle:1. Obtain a schedule of all payroll liabilities and trace to the general ledger.2. Scan journals for all periods for unusual transactions to determine whether they arerecorded correctly.3. Select a sample of 40 entries in the payroll journal and trace each to an approvedtime card.4. Discuss with management any payroll liabilities recorded in the prior year that arenot provided for in the current period.5. Examine evidence that payroll hours and wage rates are verified by an independentperson.6. Select a sample of 20 cancelled payroll checks and account for the numerical sequence.7. Review board of director meeting minutes to verify the salary for the chief executiveofficer.8. Compute payroll tax expense as a percentage of total wages, salaries, and commissions.9. Select a sample of 20 payroll payments and trace to payroll journal entries for name,date, and amounts.10. Examine owner…
Assume that you have audited accounts receivable as of 12/31/2020 and are confident that the ending balance should be $7,188,000. Further, you know that the audited balance as of 12/31/2019 was $8,462,000. You also verified cash deposits from customers through a review of the bank account. Based on that review you believe that cash receipts from customers ranges from an amount of $40,000,000 to $41,000,000.
Which amount below would represent an overstatement of revenue for the year ending 12/31/2020, based on the facts above?
1. $38,500,000
2. $41,000,000
3. $39,762,000
4. $39,100,000
ABC Manufactures is a manufacturing company, and your audit team is conducting the annual audit of its financial statements. As part of the audit procedures, you are tasked with testing the accounts receivable balance. ABC Manufactures has a significant accounts receivable balance owing to its diverse customer base. Upon initiating the audit procedures, your team sends out accounts receivable confirmations to one of ABC Manufactures largest customers with a material accounts receivable balance outstanding. However, several weeks have passed, and the confirmation has not been returned. The audit team has made follow-up attempts via phone calls and emails, but there has been minimal response. Considering the lack of responsiveness, the audit team is becoming increasingly skeptical about the effectiveness of the confirmation process in this particular situation. Describe two alternative audit procedures that the audit team may conduct that may assist them in gathering sufficient…
Chapter 20 Solutions
Auditing and Assurance Services (16th Edition)
Ch. 20 - Prob. 1RQCh. 20 - Prob. 2RQCh. 20 - Distinguish among a payroll master file, a W-2...Ch. 20 - Prob. 4RQCh. 20 - Prob. 5RQCh. 20 - Prob. 6RQCh. 20 - Prob. 7RQCh. 20 - Prob. 8RQCh. 20 - Prob. 9RQCh. 20 - Prob. 10RQ
Ch. 20 - Prob. 11RQCh. 20 - Prob. 12RQCh. 20 - Prob. 13RQCh. 20 - Prob. 14RQCh. 20 - Prob. 15RQCh. 20 - Prob. 16.1MCQCh. 20 - Prob. 16.2MCQCh. 20 - Prob. 16.3MCQCh. 20 - Prob. 17.1MCQCh. 20 - Prob. 17.2MCQCh. 20 - Prob. 17.3MCQCh. 20 - Prob. 18.1MCQCh. 20 - Prob. 18.2MCQCh. 20 - Prob. 18.3MCQCh. 20 - Prob. 19DQPCh. 20 - Prob. 20DQPCh. 20 - Prob. 21DQPCh. 20 - Prob. 22DQPCh. 20 - Prob. 23DQPCh. 20 - Prob. 24DQPCh. 20 - Prob. 25DQPCh. 20 - The following are various asset misappropriations...Ch. 20 - Archer Uniforms, Inc., is a distributor of...Ch. 20 - Prob. 28DQPCh. 20 - Prob. 29C
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