EP AUDITING+ASSURANCE...-MYACCT.LAB
16th Edition
ISBN: 9780134148656
Author: ARENS
Publisher: PEARSON CO
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Question
Chapter 25, Problem 29DQP
a.
To determine
Prepare the appropriate supplemental report in case all three indenture agreement provisions have been satisfied.
b.
To determine
Explain the manner that the supplemental report changes, in case, the net earnings after the taxes were $1,010,000 and dividends paid were $60,000.
c.
To determine
Identify the nature of the appropriate auditor’s reports in the situation.
d.
To determine
Identify the nature of the appropriate auditor’s reports in the situation.
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You are an audit manager at Foyer & Associates and have been assigned to the audit of Modern Electrical Limited (MEL) for the year ending 30 June 2021. During the planning stage of the audit, you become aware of the following matters: a.MEL has significant loans from its bank. The bank has Indicated that it is concerned about MEL'S ability to meet specific loan covenants, particularly the return on total assets (net b. The aped trade accounts receivable listing indicates that the percentage of accounts receivable exceeding 90 days has jumped from 15 per cent to 37.5 per cent during the last 12 months. The credit manager hasindicated that the is because some of MEL'S Customers are currently'experiencing financial difficulty. This question.includos Part A and B
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3. In the audit of loans payable, which of the following audit procedure would be most likely performed to validate the existence assertion?
Group of answer choices
a. Review loan contracts
b. Sending loan confirmations
c. Vouching of subsequent payments of loans
d. Performing analytical procedures
4. You are auditing the December 31, 2021, accounts payable balance of one of your firm’s divisions. The division controller’s office has provided you with a schedule listing the creditors and the amount owed to each at December 31, 2021. Which of the following audit procedures would be your best choice for determining that no individual account payable has been omitted from the schedule?
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In the audit of Emerson College, the auditor's found the client's working capital to be far below the minimum stipulated in the indenture of long-term mortgage bonds payable. In addition, the College had allowed the required insurance coverage of pledged assets to lapse. These violations were sufficient to cause the bond issue to become payable on demand. If you were the auditor of Emerson College, what are the problems associated with a violation of a debt covenant?
What are the potential ways around this problem, if any?
Chapter 25 Solutions
EP AUDITING+ASSURANCE...-MYACCT.LAB
Ch. 25 - Prob. 1RQCh. 25 - Prob. 2RQCh. 25 - Prob. 3RQCh. 25 - Prob. 4RQCh. 25 - Prob. 5RQCh. 25 - Prob. 6RQCh. 25 - Prob. 7RQCh. 25 - Prob. 8RQCh. 25 - Prob. 9RQCh. 25 - You have been asked to provide assurance on...
Ch. 25 - Prob. 11RQCh. 25 - Prob. 12RQCh. 25 - Prob. 13RQCh. 25 - Prob. 14RQCh. 25 - Explain what is meant by prospective financial...Ch. 25 - Prob. 16RQCh. 25 - Prob. 17.1MCQCh. 25 - Prob. 17.2MCQCh. 25 - Prob. 17.3MCQCh. 25 - Prob. 18.1MCQCh. 25 - Prob. 18.2MCQCh. 25 - Prob. 19.1MCQCh. 25 - Prob. 19.2MCQCh. 25 - Prob. 20.1MCQCh. 25 - Prob. 20.2MCQCh. 25 - Prob. 20.3MCQCh. 25 - Prob. 21DQPCh. 25 - You are doing a review services and related tax...Ch. 25 - Prob. 23DQPCh. 25 - Prob. 24DQPCh. 25 - Jennifer Branson is a new staff auditor on the...Ch. 25 - With greater frequency, organizations are issuing...Ch. 25 - Prob. 27DQPCh. 25 - Prob. 28DQPCh. 25 - Prob. 29DQPCh. 25 - Prob. 30DQP
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