flows for the years ended December 31, 2012 and December 31, 2011, and a summary of…
Case 8.1: Laramie Wire Manufacturing: Using Analytical Procedures in Audit Planning 1. Perform analytical procedures to help you identify relatively risky areas that indicate the need for further attention during the audit, if any. 2. Focus specifically on each of the five management assertions (existence or occurrence, completeness, valuation or allocation, rights and obligations, and presentation and disclosure) for the inventory account. Link any risks you identified for this account in question 1 to the related management assertion. Briefly explain identified risks or issues for the inventory account that require further attention, if any. Background About Laramie Wire MFG.…
(Assertions) In planning the audit of a client’s financial statements, an auditor identified the following issues that need attention.…
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinion.…
Throughout this paper a summary of the four elements of financial management will be discussed. A summary of generally acceptable accounting principles and general financial ethical standards will also be addressed. Examples from specific articles that reflect ethical standards of conduct and financial reporting practices along with the significance of each example will be identified and discussed in detail.…
The objective of the audit of financial statements is to enable the auditor to express an opinion if the financial statements are prepared in accordance with an identified financial reporting framework. The reason that materiality is allocated to those accounts sampled because materiality represents the magnitude of an omission or misstatement of an item in a financial report. The three function of the audit risk are inherent risk (IR), control risk (CR), and detection risk (DR). Every level of audit risk has an opposite connection that exists between assessed levels of controls, inherent risk, and level of detection risk…
The purpose of this paper is to define accounting, and identify the four basic financial statements. The paper also explains how the different financial statements are interrelated to each other and why they are useful to managers, investors, creditors, and employees.…
The audit will include examining evidence supporting the amounts and disclosures in the financial statements and will involve judgment about the number of transactions to be examined and the areas to be tested. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, tests of physical existence of inventories, and direct confirmation of certain assets and liabilities by correspondence with selected customers, creditors, and financial institutions. In connection with our audit of the financial statements, we will obtain an understanding of internal control sufficient to plan the audit and to determine the nature, timing and extent of audit procedures to be…
Green and Associates is the CPA firm retained by the ABC Corporation to handle their external auditing duties. The auditing team at Green and Associates took time to review aspects of ABC’s finances and had some questions regarding their client’s monthly statements that made them a little uneasy. Items such as their inventory valuation methods not to mention, Green’s new client will not submit to an audit of internal financial controls. With all of the issues that Green and Associates are encountering the four types of auditor’s opinions, if their inventory valuation methods are legal and supported by GAAP, and if ABC’s refusal to permit an internal controls audit is within federal law need to be investigated. Lastly, an opinion must be written to address the situation and detail the ethical problems involved for both ABC and Green and Associates.…
Our audit will be conducted with the objective of our expressing an opinion on the…
A large corporation with securities listed on a stock exchange is required by the rules of the stock exchange and by the rules of the Securities and Exchange Commission to provide an audit report with the annual financial statements furnished to its stockholders. It also is required to engage the auditors to provide an opinion on its internal control. Apart from legal requirements, however, a large listed corporation recognizes that it must maintain investor confidence in the reliability of its financial statements and internal control over financial reporting if it is to continue to be able to…
Would an investment generate attractive returns?- what is the degree of risk inherent in the investments-will cash flows be sufficient to service interest and principal payments to support the firm's barrowing needs-should existing investment holdings be liquidated-does the company provide a good opportunities for employment, and employee benefits-how well does this company compete in its op environment.…
Welcome to Accounting and Financial Management 1A. In this first lecture you will be introduced to the lecture staff on the course and be given the Course Outline. We will be outlining the objectives of the subject, its structure and requirements as described in the Course Outline and answer…
This report is focus on how to develop an audit strategy in carrying out a financial audit. Several requirements need to be achieved and the evaluation of the audit strategies. Evaluate audit strategy is to check whether the strategy is useful or not in carrying out a financial audit. The last part included in financial audit is the material financial statement assertion. Financial statement is the important part within a financial audit. To consider that audit strategy is assumed to apply with the level of each material financial statement assertion. As we know that transactions and balances are interrelated by double-entry bookkeeping. If assertion of enough evidence of all transactions affect an account balance we obtained then there is no need to obtain evidence to the account balance itself.…
Resource: Case 8.1: Laramie Wire Manufacturing: Using Analytical Procedures in Audit Planning from Auditing Cases: An Interactive Learning Approach located on the Week Four Materials page…