Questions from Auditing and Assurance

Q: James, who was engaged to examine the financial statements of Talbert

James, who was engaged to examine the financial statements of Talbert Corporation, is about to audit payroll. Talbert uses a computer service center to process weekly payroll as follows. Each Monday T...

Q: Yardley, CPA, prepared the flowchart below, which portrays the

Yardley, CPA, prepared the flowchart below, which portrays the raw materials purchasing function of one of Yardley’s entities, a medium-size manufacturing company, from the preparati...

Q: Rasch is the partner-in-charge of the audit of

Rasch is the partner-in-charge of the audit of Bonner Distributing Corporation, wholesaler that owns one warehouse containing 80 percent of its inventory. Rasch is reviewing the working papers that we...

Q: Abbott Corporation does not conduct a complete annual physical count of purchased

Abbott Corporation does not conduct a complete annual physical count of purchased parts and supplies in its principal warehouse but instead uses statistical sampling to estimate the year-end inventory...

Q: Kachelmeier, CPA, is auditing the financial statements of Big Z

Kachelmeier, CPA, is auditing the financial statements of Big Z Wholesaling, Inc., a continuing audit client, for the year ended January 31, 2018. On January 5, 2018, Kachelmeier observed the tagging...

Q: An auditor is examining the financial statements of a wholesale cosmetics distributor

An auditor is examining the financial statements of a wholesale cosmetics distributor with an inventory consisting of thousands of individual items. The distributor keeps its inventory in its own dist...

Q: The auditor should consider audit risk when planning and performing an audit

The auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be considered together in determining the nature, timing, and extent of aud...

Q: Green bloom Garden Centers is a small, privately held corporation that

Green bloom Garden Centers is a small, privately held corporation that has two stores in Orlando, Florida. The Green bloom family owns 100 percent of the company’s stock, and family members manage the...

Q: You were recently hired by the CPA firm of Honson & Hansen

You were recently hired by the CPA firm of Honson & Hansen. Within two weeks, you were sent to the first-year staff training course. The instructor asks you to prepare answers for the following questi...

Q: John Josephs, an audit manager for Tip, Acanoe & Tylerto

John Josephs, an audit manager for Tip, Acanoe & Tylerto, was asked to speak at a dinner meeting of the local Small Business Administration Association. The president of the association has suggested...