Auditing And Assurance Services
Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 21, Problem 13.2MCQ
To determine

Identify the reason behind a client’s physical inventory count that has been lower than the amount shown on the books at the time of the count.

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As the lead accountant for a small company, you notice that inventory purchases from a certain vendor have increased dramatically over the past few months, whereas purchases from all other vendors have decreased. You suspect that something may not be right and that there may be a fraudulent relationship between someone in your company and the vendor that is getting increased business. question: Which theft act investigative method would you use to investigate your suspicions? state evidences that you to support suspicions.
Farley Bains, an auditor with Nolls CPAs, is performing a review of Splish Brothers Inc.’s Inventory account. Splish Brothers did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $774,190. However, the following information was not considered when determining that amount.Prepare a schedule to determine the correct inventory amount. (Show amounts that reduce inventory with a negative sign or parenthesis e.g. -45 or parentheses e.g. (45).)     Ending inventory-as reported   $Enter a dollar amount            1.   Included in the company’s count were goods with a cost of $216,010 that the company is holding on consignment. The goods belong to Nader Corporation.   Enter a dollar amount           2.   The physical count did not include goods purchased by Splish Brothers with a cost of $39,630 that were shipped FOB shipping point on December 28 and did not arrive at Splish…
Rachel Warren, an auditor with Laplante CPAs, is performing a review of Skysong, Inc.’s inventory account. Skysong, did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $748,000. However, the following information was not considered when determining that amount.Prepare a schedule to determine the correct inventory amount. (If an amount reduces the account balance then enter with a negative sign preceding the number , e.g. -15,000, or parenthesis e.g. (15,000). Enter 0 if there is no effect.)     Ending inventory-as reported   $enter a dollar amount            1.   Included in the company’s count were goods with a cost of $337,000 that the company is holding on consignment. The goods belong to Harmon Corporation.   enter a dollar amount           2.   The physical count did not include goods purchased by Skysong, with a cost of $47,000 that were shipped FOB…
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