Question

In: Accounting

Requirements c. and d. For each of the? questions, identify the nature of the potential financial?...

Requirements c. and d. For each of the? questions, identify the nature of the potential financial? misstatement(s) if the control is not in effect. For each of the potential? misstatements, identify a substantive audit procedure that can be used to determine whether a material misstatement exists.

Begin by identifying the potential? misstatement(s), then identify the substantive audit? procedure(s) that can be used to determine whether a material misstatement exists.

Match each question with the corresponding roman numeral or numerals? (from the list? below) that correlates to the appropriate potential? misstatement(s).

Potential Misstatements

I.

Invoices are recorded and paid more than once.

II.

Goods received and not recorded or recorded and not received.

III.

Acquisitions from vendors are recorded at improper amounts.

IV.

Checks are disbursed and not recorded or they are recorded in the wrong time period.

V.

Receiving reports are misplaced and acquisitions not recorded.

VI.

Acquisitions are recorded in the wrong account.

VII.

Checks are disbursed and no merchandise is received.

VIII.

Disbursements made for goods not received.

IX.

Checks are received by someone other than the supplier for whom they are intended.

X.

Late recording or? non-recording of liabilities to suppliers.

Substantive Procedures

1.

Search for unrecorded liabilities.

2.

Examine checks clearing the bank prior to? year-end to determine that they were recorded in the cash disbursements journal prior to? year-end.

3.

Examine supporting invoice for reasonableness of accounting distribution.

4.

Examine vendor? statements, noting any unrecorded payments appearing on the statement.

5.

Review of physical inventory shortages.

6.

Trace checks to supporting invoice and determine reasonableness of expenditure. Reconcile? vendors' statements.

7.

Vendor statement reconciliation.

8.

Test? extensions, footings,? discounts, and freight terms on? vendors' invoices.

Question

Potential Misstatement(s) Substantive Procedure(s)

1.

2.

3.

4.

5.

6.

7.

8.

Solutions

Expert Solution

Q. No.

Potential Misstatements

Substantive Procedures
I.Invoices are recorded and paid more than once. (6) Trace checks to supporting invoice and determine reasonableness of expenditure. Reconcile? vendors' statements.
(7) Vendor statement reconciliation.
II.Goods received and not recorded or recorded and not received. (4) Examine vendor? statements, noting any unrecorded payments appearing on the statement.
(1) Search for unrecorded liabilities.
(7) Vendor statement reconciliation.
III.Acquisitions from vendors are recorded at improper amounts. (7) Vendor statement reconciliation.
(3) Examine supporting invoice for reasonableness of accounting distribution.
(8) Test? extensions, footings,? discounts, and freight terms on? vendors' invoices.
IV.Checks are disbursed and not recorded or they are recorded in the wrong time period. (2) Examine checks clearing the bank prior to? year-end to determine that they were recorded in the cash disbursements journal prior to? year-end.
(6) Trace checks to supporting invoice and determine reasonableness of expenditure. Reconcile? vendors' statements.
V.Receiving reports are misplaced and acquisitions not recorded. (1) Search for unrecorded liabilities.
VI.Acquisitions are recorded in the wrong account. (7) Vendor statement reconciliation.
VII.Checks are disbursed and no merchandise is received. (5) Review of physical inventory shortages.
(6) Trace checks to supporting invoice and determine reasonableness of expenditure. Reconcile? vendors' statements.
VIII.Disbursements made for goods not received. (6) Trace checks to supporting invoice and determine reasonableness of expenditure. Reconcile? vendors' statements.
IX.Checks are received by someone other than the supplier for whom they are intended. (6) Trace checks to supporting invoice and determine reasonableness of expenditure. Reconcile? vendors' statements.
X.Late recording or? non-recording of liabilities to suppliers. (1) Search for unrecorded liabilities.
(7) Vendor statement reconciliation.

Related Solutions

In the diagram, which point is at the lowest potential? (a) A (b) B (c) C (d) D
In the diagram, which point is at the lowest potential?(a) A(b) B(c) C(d) D
Multiple choice questions. Choose one of the options which are A,B,C and D for each of...
Multiple choice questions. Choose one of the options which are A,B,C and D for each of the sub-question listed in numeral. 1. Accounting is the information system that           A. measures business activity.           B. communicates the results to decision makers.           C. process data into reports.           D. All of the above. 2. Which is not a characteristic of managerial accounting information?           A. Emphasizes the external financial statements.           B. Provides detailed information about individual parts of the...
A multiple-choice examination consists of 85 questions, each having possible choices a, b, c, d, and...
A multiple-choice examination consists of 85 questions, each having possible choices a, b, c, d, and e. Approximate the probability that a student will get at most 18 answers correct if she randomly guesses at each answer. (Note that, if she randomly guesses at each answer, then the probability that she gets any one answer correct is 0.2.) Use the normal approximation to the binomial with a correction for continuity.
1.Multiple-choice questions each have four possible answers left parenthesis a comma b comma c comma d right parenthesis(a, b, c, d)
1.Multiple-choice questions each havefour possible answers left parenthesis a comma b comma c comma d right parenthesis(a, b, c, d),one of which is correct. Assume that you guess the answers to three such questions.Use the multiplication rule to find P(CWW), where C denotes a correct answer and W denotes a wrong answerP(CWW)equals=2.Assume that random guesses are made for 3 multiple-choice questions on a test with 5 choices for eachquestion, so that there are N equals=3 trials, each with probability of...
Answer Q1-Q4 choose a, b, c,d and e for each questions to Answer Q1.If you find...
Answer Q1-Q4 choose a, b, c,d and e for each questions to Answer Q1.If you find a group of organisms that all appear to have similar appearances, you could say that they belong to the same species within kingdom Animalia if ____. a. they are eukaryotic, regardless of whether they are multicellular or single-celled b. they are multicellular eukaryotes that look different from other organisms in the area. c. they are multicellular eukaryotes that look the same. d. they are...
Answer these questions. Describe the evidence for A, C and D. C. How does natural selection...
Answer these questions. Describe the evidence for A, C and D. C. How does natural selection produce change in a population of mice? What evidence supports the conclusion that natural selection has occurred? D.How does variation in the environment affect natural selection? What evidence supports effects of the environment on natural selection?
__________ requirements serve to insure the performance of futures contracts. D. Margin B. Experience C. Age...
__________ requirements serve to insure the performance of futures contracts. D. Margin B. Experience C. Age A. Income A put option is in the money if the strike price is __________ the market price of the underlying security. C. less than A. equal to B. greater than D. none of the above Assume that you hold a short position in an oil futures contract at $40 per barrel and covered as the price rose to $50 per barrel, the profit/loss...
You work as a financial analyst and you will identify a potential investment. You will then...
You work as a financial analyst and you will identify a potential investment. You will then use NPV, PP, PI, and IRR investment criteria to evaluate the opportunity. Finally, you will make a recommendation to the board of the directors of the company. If you make any assumption in your analysis, please specify and explain it. You can Google “business for sale” to find the investment opportunities or find them in a local newspaper’s classified section. You evaluation report will...
Analyze following logic expression representing a digital system, Z = (A+C)(A'+D')(B'+C'+D) Identify the 0-hazards and write...
Analyze following logic expression representing a digital system, Z = (A+C)(A'+D')(B'+C'+D) Identify the 0-hazards and write down the logic expression for the implementation of static free circuit. Note that you would be requiring three additional loops in K-map.
Multiple-choice questions each have five possible answers (a, b, c, d, e)​, one of which is correct
Multiple-choice questions each have five possible answers (a, b, c, d, e)​, one of which is correct. Assume that you guess the answers to three such questions. a. Use the multiplication rule to find​ P(CCW), where C denotes a correct answer, and W denotes a wrong answer.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT