Simply Soups Inc.: A Teaching Case Designed to Integrate the Electronic Cash Confirmation Process into the Auditing Curriculum ABSTRACT: Simply Soups Inc.‚ a producer of organic canned soups‚ has hired your firm‚ Putnam and Jacobs LLP‚ to perform a financial statement audit for the year ended December 31‚ 2013. Using the PCAOB’s proposed standard on confirmations and electronic confirmations‚ you are to complete the testing of the cash balance reported by Simply Soups Inc. at year-end. Today
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1.) After performing any alternative procedures‚ the auditor should evaluate the combined evidence provided by the confirmations and the alternative procedures to determine whether sufficient evidence has been obtained about all the applicable financial statement assertions. In performing that evaluation‚ the auditor should consider (a) the reliability of the confirmations and alternative procedures; (b) the nature of any exceptions‚ including the implications‚ both quantitative and qualitative‚
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information could not be changed by clients when they were transferring the paper confirmation. Standard written back confirmations have not been effective in detecting the fraud at Peregrine. According to the case‚ Peregrine changed the information by using Photoshop‚ Excel‚ scanners and printers when they were using standard written back confirmations. However when the company agreed to using electronic confirmation‚ it decided to commit fraud
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whether the client owns the asset. 2. Confirmation--is the receipt of a written or oral response from and independent third party verifying information requested by the auditor. Because of the independence of the third party‚ confirmations are a highly desirable‚ though costly‚ type of evidence. SAS 67 (AU 330) describes two types of confirmations. A positive confirmation asks the respondent to provide an answer in all circumstances‚ while a negative confirmation asks for a response only if the information
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person must climb‚ step by step‚ until he or she reaches the summit to enjoy the view. The hydration of the Sacraments of Initiation is Baptism; it’s the entrance into the Christian path. The gift of the Holy Spirit received during the Sacrament of Confirmation gives the strength needed to slowly‚ but surely make the journey. The summit that is then reached after the climb is the Sacrament of the Eucharist. As it is said in the Catechism of the Catholic Church‚ “The Holy Eucharist completes Christian
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Case 10-8 Ellie Enterprises An investment that is not one of the three traditional asset types such as stocks‚ bond and cash are considered as an alternative investment. “These types of investments include hedge funds‚ managed futures‚ real estate‚ commodities and derivative contracts.” (www.investopedia.com). These are subject to less regulation and use leverage and derivative instruments to optimize their returns. “In spite of many pensions and private endowments beginning to invest in these
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biblical roots In fact‚ confirmation—a special anointing with the Holy Spirit—has its roots in Old Testament prophecy. Isaiah prophesied that the promised Messiah would be specially anointed with the Holy Spirit. The Hebrew word Messiah literally means "anointed one": "There shall come forth a shoot from the stump of Jesse‚ and a branch shall grow out of his roots. And the Spirit of the Lord shall rest upon him‚ the spirit of wisdom and understanding‚ the spirit of counsel and might‚ the spirit of knowledge and the fear of
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Chapter 16 Exercises 1-The two primary classes of transactions in the sales and collection cycle are: | a. sales and sales discounts. | b. sales and cash receipts. | c. sales and sales returns. | d. sales and accounts receivable. | 2- Which of the following types of receivables would not deserve the special attention of the auditor? | a. Accounts receivables with credit balances. | b. Accounts that have been outstanding for a long time. | c. Receivables from affiliated
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valuation. By using confirmations‚ the auditors are hoping that the third party would confirm or deny the stated amount‚ or add additional comments with the confirmation. By examining the exceptions (which includes the non-repliers)‚ the auditors are accomplishing the existence (client exists)‚ completeness (balances that should be recorded are recorded)‚ and valuation assertion (amount is appropriate). Because the auditors will always have non-repliers‚ accounts receivable confirmations are likely to
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Evidence for Retail Sales 9.3 Longeta Corporation . . . . . . . . . . . . . . . . . . . . . . . . 285 Auditing Revenue Contracts 9.4 Bud ’s Big Blue Manufacturing . . . . . . . . . . . . . . . . . 291 Accounts Receivable Confirmations O T HE R C AS ES THAT DI S CUSS T OPICS RELATED TO THI S S ECTION 8.2 Northwest Bank . . . . . . . . . . . . . . . Developing Expectations for Analytical Procedures 8.3 Burlingham Bees . . . . . . . . . . . . . . Using Analytical Procedures
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