![EBK AUDITING AND ASSURANCE SERVICES](https://www.bartleby.com/isbn_cover_images/9780134067117/9780134067117_largeCoverImage.gif)
EBK AUDITING AND ASSURANCE SERVICES
16th Edition
ISBN: 9780134067117
Author: Hogan
Publisher: VST
expand_more
expand_more
format_list_bulleted
Question
Chapter 22, Problem 27DQP
a.
To determine
Explain the manner in which the auditor will verify the balances as of September 28, 2013.
b.
To determine
Explain the action of auditor while evaluating the amount shows as net income.
c.
To determine
Explain the sources of evidence might the auditor use to satisfy the occurrence objective for (1) Repurchase of common stock, (2) share-based compensation and (3) common share issued.
d.
To determine
Explain the manner in which the amounts shown as of September 27,2014, relate to the amounts shown in Incorporation A’s
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
Which of the following is least likely to be a procedure included in an accountant’s review of interim financial information of a public entity?
a.Compare disaggregated revenue data by month to that of the previous interim period.
b.Read available minutes of meetings of stockholders.
c.Inquire of management concerning significant journal entries and other adjustments.
d.Observe counting of physical inventory.
A. Griffin audited the financial statements of Dodger Magnificat Corporation for the yearended December 31, 2017. She completed gathering sufficient appropriate evidence onJanuary 30 and later learned of a stock split voted by the board of directors on February 5.The financial statements were changed to reflect the split, and she now needs to dual datethe report on the entity’s financial statements. Which of the following is the proper form?a. December 31, 2017, except as to Note X, which is dated January 30, 2018.b. January 30, 2018, except as to Note X, which is dated February 5, 2018.c. December 31, 2017, except as to Note X, which is dated February 5, 2018.d. February 5, 2018, except for the date of the auditor’s report, for which the date isJanuary 30, 2018.
In line with your audit with DAVE, Inc. financial statements, the company accountantpresented to you the balance sheet that follows. You reviewed the client’s accountingrecords and books based thereon. You discovered that books of accounts are inagreement in the said balance sheet as presented below:
DAVE, INC.STATEMENT OF FINANCIAL POSITIONDecember 31, 2021
ASSETS LIABILITIES AND OWNERS EQUITYCash P 80,000 Accounts Payable P 32,000Accounts Receivable 160,000 Notes Payable 64,000Notes Receivable 48,000 Capital Stock 160,000Inventories 400,000 Retained Earnings 432,000Total P 688,000 Total P 688,000
Further review and investigation of the company’s books revealed the followingomissions and errors which were not corrected during the year of errors:
2018 2019…
Chapter 22 Solutions
EBK AUDITING AND ASSURANCE SERVICES
Ch. 22 - List four examples of interest-bearing liability...Ch. 22 - Prob. 2RQCh. 22 - Prob. 3RQCh. 22 - Prob. 4RQCh. 22 - Prob. 5RQCh. 22 - Distinguish between (a) tests of controls and...Ch. 22 - Prob. 7RQCh. 22 - Prob. 8RQCh. 22 - Prob. 9RQCh. 22 - Prob. 10RQ
Ch. 22 - Prob. 11RQCh. 22 - Prob. 12RQCh. 22 - Prob. 13RQCh. 22 - Prob. 14RQCh. 22 - Explain the relationship between the audit of...Ch. 22 - Prob. 16.1MCQCh. 22 - Prob. 16.2MCQCh. 22 - Prob. 16.3MCQCh. 22 - Prob. 17.1MCQCh. 22 - Prob. 17.2MCQCh. 22 - Prob. 17.3MCQCh. 22 - Prob. 18.1MCQCh. 22 - Prob. 18.2MCQCh. 22 - Prob. 18.3MCQCh. 22 - Items 1 through 6 are questions typically found in...Ch. 22 - Prob. 20DQPCh. 22 - Prob. 21DQPCh. 22 - Prob. 22DQPCh. 22 - Prob. 23DQPCh. 22 - Prob. 24DQPCh. 22 - The Redford Corporation took out a 20 -year...Ch. 22 - Prob. 26DQPCh. 22 - Prob. 27DQPCh. 22 - The following audit procedures are commonly...Ch. 22 - Prob. 30DQPCh. 22 - Prob. 31DQP
Knowledge Booster
Similar questions
- Subsequent Events and Subsequently Discovered Facts. Michael Ewing is auditing the financial statements of Dallas Company for the year ended December 31, 2017. In concluding the process of gathering sufficient appropriate evidence, Ewing has asked to meet with his supervisor on the audit (John Ross) to discuss responsibility for events occurring afterthe date of the financial statements.Required:a. What is a subsequent event? During what time period is Ewing responsible for subsequent events?b. List some procedures that Ewing may perform to assist him in identifying subsequent events.c. What are two types of subsequent events? How should information related to these types of subsequent events be reflected in Dallas’s financial statements?d. Assume that on January 8, 2018, Dallas Company agreed to acquire Houston Inc. in a significant transaction. The date of Ewing’s report was February 7, 2018, and Dallas issued its financial statements (and Ewing’s reports on its financial statements…arrow_forwardThe fieldwork for the December 31, 2018 audit of Schmidt Corporation ended on March 17, 2019. The financialstatements and auditor's report were issued on March 29, 2019. In each of the material situations (1 through 5)below, indicate the appropriate action (a, b, c). The possible actions are as followsa. Adjust the December 31, 2018 financial statements.b. Disclose the information in a footnote in the December 31, 2018 financial statements.c. No action is required.The situations are as follows:________ 1. On March 1, 2019, one of Schmidt Corporation's major customers declared bankruptcy. The customer'sfinancial condition in 2018 was deteriorating and they owed Schmidt Corporation a large sum of money as of thebalance sheet date.________ 2. On February 17, 2019, Schmidt Corporation sold some machinery for its book value.________ 3. On February 20, 2019 a flood destroyed the entire uninsured inventory in one of Schmidt'swarehouses.________ 4. On January 5, 2019, there was a significant…arrow_forwardYou are auditing the financial statements of A Company for the year ended December 31, 2023. The Company's income statements indicated the following net income:2021: P1,200,0002022: P1,490,0002023: P1,325,000An examination of the accounting records for the year ended December 31, 2023 indicates that several errors were made. The following errors were discovered:A. Unused supplies at the end of each year were consistently omitted:2020: P95,000; 2022: P100,000; 2023: P140,000B. The footings and extensions showed that the inventory on December 31, 2022 was understated by P80,000C. P105,000 worth of inventories were received on January 5, 2022 and were not included in the physical count as of December 31, 2021. Upon investigation, however, you discovered that these goods were shipped free-alongside by the supplier on December 28, 2021. The invoice for the goods were received and recorded in the purchase journal on December 29, 2021.D. The following advance payments to suppliers at the…arrow_forward
- You are the audit team assign to audit the unaudited set of financial statements for XYZ Company Ltd. for year ended 30 June 2002. Prepare written report to highlight the audit procedures to be used to substantiate/confirm the amounts reported for following items on the financial statements provided: Revenue and accounts receivable Purchases and accounts payablearrow_forwardDescribe the audit procedures you would use to learn about each of the situations listed. Begin by identifying all of the audit procedures you would use to learn about situation 1. (Select the 4 choices that apply.) A.Analyze legal expense for the period under audit and review invoices and statements of legal counsel for indications of contingent liabilities. B.Review records for unusual journal entries made to the equity accounts (Common stock and Retained earnings) subsequent to year-end. C.Discuss, specifically, any related party transactions with management and include information in letter of representation. D.Obtain letters from all major attorneys performing legal services for the client as to the status of pending litigation or other contingent liabilities. E.Confirm details of stock transactions with registrar and transfer agent. F.Review financial statements of affiliate, and where related party transactions are apparent, make direct…arrow_forwardThe following audit procedures are commonly performedby auditors in the verification of owners’ equity:1. Review the articles of incorporation and bylaws for provisions about owners’ equity.2. Analyze all owners’ equity accounts for the year and document the nature of anyrecorded change in each account.3. Account for all certificate numbers in the capital stock book for all shares outstanding.4. Examine the stock certificate book for any stock that was cancelled.5. Review the minutes of the board of directors’ meetings for the year for approvalsrelated to owners’ equity.6. Recompute earnings per share.7. Review debt provisions and senior securities with respect to liquidation preferences,dividends in arrears, and restrictions on the payment of dividends or the issue of stock.a. State the purpose of each of these seven audit procedures.b. List the type of misstatements the auditors can uncover by the use of each auditprocedure.arrow_forward
- The data below is the sales of MGM Co. The accountant of the company hasprovided you with the following data as well as his computed balance ofP2,350,000 as the gross sales of the company. As the external auditor of thefirm, you are tasked to compute whether the gross sales presented to you isunderstated or overstated as compared to your audited amount. How much isthe understatement or overstatement? (Place 0 if there is no misstatement. If theamount represents an overstatement, place a - sign before the amount. No needto provide description.)arrow_forwardWhich of the following may not be included in a typical audit program for auditing Retained Earnings? a. Reference to market quotations for the granting of share options to employees. b. Reference to fair market value of real property declared as property dividends. c. Determination of the effect of a change in policy regarding the use of average cost formula for inventories for the current year, where the entity previously elected the first-in-first-out cost formula. d. Reference to market quotations for the declaration of a 10% stock dividends.arrow_forwardYou have been assigned to audit the financial statements of SAN MIGUEL CORPORATION for the year 2017. The company is a dealer of appliances and has several branches in Metro Manila. Its main office is in Makati City. You were given by the company controller the unadjusted balances of the items to be included in the company’s statement of financial position and statement of income as of and for the year ended December 31, 2017. Audit findings are as follows: I. AUDIT OF CASH A cash count was conducted by your staff on January 7, 2018. The petty cash fund of P60,000 maintained by the company on an imprest basis reflected a balance of P22,750. Unreplenished expenses totaled P37,250 of which P9,510 pertains to January 2018. You were furnished a copy of the company’s bank reconciliation statement with BPI Bank as follows: Balance per bank P277,994 Add: Deposit in transit 248,836 Bank debit memos 712,750 Returned check 63,000 Less: Outstanding checks (174,580) Book error (72,000) Balance…arrow_forward
- For a publicly owned company, indicate which of the fol-lowing accounting activities are likely to occur at or shortly after year-end. (More than one answer may be correct.)a. Preparation of income tax returns.b. Adjusting and closing of the accounts.c. Drafting of disclosures that accompany the fi nancialstatements.d. An audit of the fi nancial statements by an independentCPA fi rm.arrow_forwardYou are the audit team assign to audit the unaudited set of financial statements for XYZ Company Ltd. for year ended 30 June 2002. Prepare written report to highlight the audit procedures to be used to substantiate/confirm the amounts reported for following items on the financial statements provided: Purchases and accounts payablearrow_forward[The following information applies to the questions displayed below.] Megan Company (not a corporation) was careless about its financial records during its first year of operations, 2017. It is December 31, 2017, the end of the annual accounting period. An outside CPA has examined the records and discovered numerous errors, all of which are described here. Assume that each error is independent of the others Analyze each error and indicate its effect on 2017 and 2018 net income, assets, and liabilities if not corrected. Do not assume any other errors. Use these codes to indicate the effect of each dollar amount: O = overstated, U = understated, and NE = no effect. The first transaction is used as an example. Wages earned by employees during 2017 not recorded or paid in 2017 but recorded and paid in 2018, $500. (Enter all values as positive values.) I'm unsure why my answer is incorrect.. Thanks.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
- Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305080577/9781305080577_smallCoverImage.gif)
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub