3. Explain disclosure assertions issues related to investments Audit? 4. For each of the following substantive...

3. Explain disclosure assertions issues related to investments Audit?

4. For each of the following substantive procedures, first note whether it is a test of details of transactions or a test of details of account balances. Then decide for which assertion the test provides the best evidence.

a. Trace large cash receipts and payments to the source documents and the general ledger.

b. Examine copies of note and bond agreements.

c. Recompute accrued interest payable.

d. Review debt activity for a few days before and after year-end to determine whether transactions are included in the proper period.

e. Examine due dates on notes and bonds for proper classification between current and long term debt.

Solutions

Expert Solution

3. Assertions related to audit on investments:

a. Completeness: This assertion is that all investment balances have been fully reported. This can be done by verifying whether the effect of purchases, sales, Income transactions that occured during the period were recorded.

b. Existence: This asssertion is that balances are actually adjusting as on balance sheet date. This assertion can be satisfie by verifying whether purchases, sales, investment revenue resulted from transactions occured during the period.

c. Rights and Obligations: This assertion is that the entity has the rights to the investments disclosed. This can be satisfied by verifying that investments were made in the name of the entity.

d. Presentation and disclosure: This asssertion is that the entity has presented these accounts in the financial statement as per applicable accounting standards and GAAP.

4. a). Test of transactions, related assertion Existence

b). Test of details of account balances. Completeness, Existence

c). Test of details of account balances. Completeness, Existence

d). Test of details of transactions. Assertion: Cut off

e). Test of details of transactions. Assertion: Existence

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Explain disclosure assertions issues related to investments Audit?

Which of the following assertions: Existence/Occurrence, Valuation/Allocation, Completeness, Presentation, and Disclosure relate to these audit procedures?...

Which of the following assertions: Existence/Occurrence, Valuation/Allocation, Completeness, Presentation, and Disclosure relate to these audit procedures? 1)Trace beginning balance for accounts receivable and to the prior year's working papers 2)Determine whether there are credit balances that are significant in the aggregate that should be reclassified as liabilities 3)Send confirmations to entities that have purchased accounts receivable 4)Review activity in the general ledger account for accounts receivable and investigate entries that appear unusual in amount or source 5)Use generalized audit software...

8.56 Assertions and Substantive Procedures for Property, Plant, and Equipment (PP&E). Following are the four assertions...

8.56 Assertions and Substantive Procedures for Property, Plant, and Equipment (PP&E). Following are the four assertions about account balances that can be applied to the audit of a company’s PP&E, including assets the company has constructed itself: existence, rights and obligations, completeness, and valuation and allocation. Required: For each of the following substantive procedures, (1) cite one assertion most closely related to the evidence the procedure will produce (the primary assertion) and (2) when appropriate, cite one or more other...

Discuss the issues related to disclosure in the AML compliance process

Management Assertions and Audit Evidence Assignment 7-26 - Classify each of the following audit procedures according...

Management Assertions and Audit Evidence Assignment 7-26 - Classify each of the following audit procedures according to the: accounting/audit cycle (e.g., sales and collection); audit evidence: (1) physical examination (inspection of tangible assets), (2) confirmation, (3) inspection (examination) of records/documents (tracing or vouching), (4) analytical procedures, (5) inquiries ofthe client, (6) recalculation(of calculations), (7) reperformance(of a procedures), and (8) observation. Type of audit test (e.g., test of control, substantive test of transaction, substantive test of details of balance or analytical...

There are three categories of management assertions. Each category includes assertions related to that specific category of...

There are three categories of management assertions. Each category includes assertions related to that specific category of management assertions. Explain which assertion you deem to be the most important and thus should be the primary focus to auditors when performing the audit. Also explain which management assertion you deem to be the least crucial.

For each of the following specific audit procedures, identify the category (assertions about classes of transactions...

For each of the following specific audit procedures, identify the category (assertions about classes of transactions and events or assertions about account balances) and the primary assertion being tested. 1. Tracing the prices used by the entity’s billing program for pricing sales invoices to the entity’s approved price list. 2. Examining employee paychecks before and after year-end to determine if their salaries are recorded in the proper period. 3.Agreeing the total of the account’s payables subsidiary ledger to the accounts...

You need to clearly identify at least 3 distinct, substantive issues. For each issue you need...

You need to clearly identify at least 3 distinct, substantive issues. For each issue you need to 1), identify evidence from the case text that shows why this issue is important, 2), use theory from our textbook as a base for your analysis, and 3), draw an analogy from library materials other than the textbook to strengthen your argument Assume that you are the Director of Human Resources for a Fortune 500 firm (a Fortune 500 firm is one of...

You’ll need to come up with programs for the substantive audit procedures for each of the...

You’ll need to come up with programs for the substantive audit procedures for each of the functional balance sheet areas (indicated with an asterisk (*) below). B series* Cash Substantive Audit Documentation C series* Accounts Receivable Substantive Audit Documentation D series* Inventory Substantive Audit Documentation E series* Prepaids Substantive Audit Documentation F series* Property, Plant and Equipment Substantive Audit Documentation I series* Other Assets Substantive Audit Documentation L series* Current Liabilities Substantive Audit Documentation N series* Notes Payable Substantive Audit...

4. Explain how each of the following procedures could be used in the audit of fixed...

4. Explain how each of the following procedures could be used in the audit of fixed assets, e.g., various types of equipment used in the business. Organize your answer as follows: Procedure Audit Test performed Assertion(s) tested Observation Physical examination Inquiry Confirmation Examination of documents Recomputation Vouching Analytical procedures 5. Businesses often have litigation against them that the auditor has to identify and adequately disclose. List the financial assertions that apply to Contingencies. For each assertion indicate two or...

Subjects