Questions from Auditing and Assurance

Q: Listed below are audit situations that may affect the audit of receivables

Listed below are audit situations that may affect the audit of receivables and revenue. a. The audit of a machinery manufacturing company that engages in bill and hold transactions. b. The audit of a...

Q: Hayden Corp. uses an enterprise resource planning (ERP) system

Hayden Corp. uses an enterprise resource planning (ERP) system. In their audit of receivables and revenues, the auditors have identified the following data elements in the corporation’s database that...

Q: In their work on accounts receivable and elsewhere in an audit,

In their work on accounts receivable and elsewhere in an audit, the independent auditors often make use of confirmation requests. a. What is an audit confirmation request? b. What characteristics shou...

Q: During preliminary conversations with a new staff assistant, you instruct her

During preliminary conversations with a new staff assistant, you instruct her to send out confirmation requests for both accounts receivable and notes receivable. She asks whether the confirmation req...

Q: Lakeside Company has retained you to conduct an audit so that it

Lakeside Company has retained you to conduct an audit so that it will be able to support its application for a bank loan with audited financial statements. The president of Lakeside states that you wi...

Q: During the audit of Solar Technologies, Inc., the auditors sent

During the audit of Solar Technologies, Inc., the auditors sent confirmation requests to customers whose accounts had been written off as uncollectible during the year under audit. An executive of Sol...

Q: What action should be taken by the auditors when the count of

What action should be taken by the auditors when the count of cash on hand discloses a shortage?

Q: Walter Conn, CPA, is engaged to audit the financial statements

Walter Conn, CPA, is engaged to audit the financial statements of Bingo Wholesaling for the year ended December 31, 20X0. Conn obtained and documented an understanding of the client and its environmen...

Q: An assistant auditor was instructed to “test the aging of accounts

An assistant auditor was instructed to “test the aging of accounts receivable as shown on the schedule prepared by the client.” In making this test, the assistant traced all past-due accounts shown on...

Q: Hale Nelson, CPA, is engaged to audit the financial statements

Hale Nelson, CPA, is engaged to audit the financial statements of Hollis Manufacturing, Inc. Hollis engages in very complex sales agreements that create issues with respect to revenue recognition. As...