1) If you were auditing Accounts Payable at a service firm, which assertion/s would be most...

1) If you were auditing Accounts Payable at a service firm, which assertion/s would be most at risk of misstatement, and why?

2) Explain how different groups of users of the financial statements may use the audit report for different objectives or purposes?

Expert Solution

2)	Users of Financial Statements	Purpose/ Objective of Financial statements
	Suppliers	To analyze the company's ability to repay
	Stockholders	The decision of retaining or selling their stock in a particular company
	Investors	To know the Company's potentiality to repay. Their profitability, return on the investment in the business and whether to continue or not.
	Lenders	To analyze the company's ability to repay
	Employees	To know the company's stability, functioning, payroll processing in time and to develop their career
	Customers	They are the purpose of the business. To see the company's operations, customer-centric or not.
	The Government	For tax-related purposes.
	General Public	For outsiders to decide to have a relationship with the company
	Management	For the daily functioning of the business, their budgeting purpose, funding decisions etc..

1)	Accounts Payable Assertions

	Existence
	Completeness
	Cutoff

	Existence would be at more risk because
	There are chances of duplicate invoices or payments involved.

ekkarill92 answered 1 year ago

Auditing the accounts payable balance on the balance sheet

When auditing the accounts payable balance on the balance sheet, an auditor’s procedures most likely would focus primarily on management’s assertion of Select one:a. Existenceb. Rights and obligationsc. Presentation and disclosured. Completeness.

In Auditing, please provide some examples of financial statement accounts for the Valuation management assertion and...

In Auditing, please provide some examples of financial statement accounts for the Valuation management assertion and the Ownership management assertion.

In Auditing, please provide some examples of financial statement accounts for the Valuation management assertion and...

In Auditing, please provide some examples of financial statement accounts for the Valuation management assertion and the Ownership management assertion.

1. In a manufacturing firm, which are the most important accounts to analyze for liquidity problems?...

1. In a manufacturing firm, which are the most important accounts to analyze for liquidity problems? a. Cash account on the balance sheet b. Cash, Accruals, Prepaid, and Accounts Receivable c. Notes Payable, Cash, and Accounts Payable d. Accounts Receivable, Inventory, and Accounts Payable 2. Golf Inc. and Golfanatics Corp. are close competitors. Last year, both had the same level of cost of goods sold, but Golf Inc. turned its inventory over five times during the year, whereas Golfanatics turned...

You are auditing the accounts of Chavez Ramos Pty Ltd, a small manufacturing firm in the...

You are auditing the accounts of Chavez Ramos Pty Ltd, a small manufacturing firm in the eastern suburbs of Melbourne. During the year one of the owners contributed cash and other private assets from her home office to the business, with the following general journal bringing them to account in the books: Dr/Cr Account Debit Credit DR Cash 5,500 DR Equipment 10,000 DR Computer 1,250 DR Printer 1,000 CR Capital 17,750 (Contribution by owner) Required: Explain in detail one substantive...

[Auditing] 3. Which of the following controls would be most effective in detecting a misstatement of...

[Auditing] 3. Which of the following controls would be most effective in detecting a misstatement of the completeness assertion with respect to accounts payable? a. A list of outstanding checks written to vendors is generated during the preparation of the monthly bank reconciliation. b. Purchase orders must be accompanied by properly approved purchase requisitions before they are submitted to vendors. c. The AIS purchases and disbursements application will not prepare a check to a supplier without a valid ID number...

Instructions: Answer the following questions about auditing inventory, goods and services, and Accounts Payable: Question 1:...

Instructions: Answer the following questions about auditing inventory, goods and services, and Accounts Payable: Question 1: What are the specific 5 management assertions related to Accounts Payable? ANSWER: Question 2: What are some inherent risk factors that often make inventory material, complex, and subject to manipulation? ANSWER: Question 3: What are some examples of specific frauds in the acquisition and payment cycle? ANSWER: Question 4: What 4 things does an effective inventory control system provide reasonable assurance about? ANSWER: Question...

Which of the following statement(s) is/are most likely to be true? I. If you were borrowing...

Which of the following statement(s) is/are most likely to be true? I. If you were borrowing funds from a bank, and the quoted interest rate was 8% p.a., you would be better off if the bank used quarterly compounding rather than daily compounding. II. If you were depositing funds at a bank and the quoted interest rate was 8% p.a., with interest compounded daily, you would be better off if the bank used a 360-day basis rather than a 365-day...

You are auditing the accounts of Jack Cooks Pty Ltd, a small printing firm in regional...

You are auditing the accounts of Jack Cooks Pty Ltd, a small printing firm in regional Victoria. During the year one of the owners contributed cash and other private assets to the business, with the following general journal bringing them to account in the books: DR Cash 7,800 DR Motor Vehicle 45,000 DR Computer 1,500 DR Printer 1,250 CR Capital 55,550 (Contribution by owner) Required: Explain in detail one substantive test (including the source document as applicable) for each of...

Firm A purchases $150,000 in inventory using 40% cash and 60% Accounts Payable. Which of the...

Firm A purchases $150,000 in inventory using 40% cash and 60% Accounts Payable. Which of the following statements is false? Firm A's shareholder equity was unaffected Firm A's current assets decreased by $60,000 Firm A's inventory increased by $150,000 Firm A's liabilities increased by $90,000 2. A client purchases $200,000 worth of goods and pays 25% cash. Which of the following statements is true? Current assets increase by $200,000 Liabilities increase by $150,000 Shareholder’s equity increases by $50,000 Account receivable...

Question

1) If you were auditing Accounts Payable at a service firm, which assertion/s would be most...

Solutions

Expert Solution

Related Solutions

Auditing the accounts payable balance on the balance sheet

In Auditing, please provide some examples of financial statement accounts for the Valuation management assertion and...

In Auditing, please provide some examples of financial statement accounts for the Valuation management assertion and...

1. In a manufacturing firm, which are the most important accounts to analyze for liquidity problems?...

You are auditing the accounts of Chavez Ramos Pty Ltd, a small manufacturing firm in the...

[Auditing] 3. Which of the following controls would be most effective in detecting a misstatement of...

Instructions: Answer the following questions about auditing inventory, goods and services, and Accounts Payable: Question 1:...

Which of the following statement(s) is/are most likely to be true? I. If you were borrowing...

You are auditing the accounts of Jack Cooks Pty Ltd, a small printing firm in regional...

Firm A purchases $150,000 in inventory using 40% cash and 60% Accounts Payable. Which of the...