Questions from Auditing and Assurance

Q: A client company wishes to conduct its physical inventory on a sampling

A client company wishes to conduct its physical inventory on a sampling basis. Many items will not be counted. Under what general conditions will this method of taking inventory be acceptable to the a...

Q: Hana Ranch Company, which has never been audited, is asked

Hana Ranch Company, which has never been audited, is asked on October 1 by its bank to arrange for a year-end audit. The company retains you to make this audit and asks what measures, if any, it shoul...

Q: “A well-prepared balance sheet usually includes a statement that

“A well-prepared balance sheet usually includes a statement that the inventories are valued at cost.” Evaluate this quotation.

Q: Darnell Equipment Company uses the LIFO method of valuation for part of

Darnell Equipment Company uses the LIFO method of valuation for part of its inventories and weighted-average cost for another portion. Would you be willing to issue an unqualified opinion under these...

Q: “If the auditors can determine that all goods in the physical

“If the auditors can determine that all goods in the physical inventory have been accurately counted and properly priced, they will have discharged fully their responsibility with respect to inventory...

Q: How do the independent auditors use the client’s backlog of unfilled sales

How do the independent auditors use the client’s backlog of unfilled sales orders in the examination of inventories?

Q: The controller of a new client company informs you that most of

The controller of a new client company informs you that most of the inventories are stored in bonded public warehouses. He presents warehouse receipts to account for the inventories. Will careful exam...

Q: Explain the significance of the purchase order to adequate internal control over

Explain the significance of the purchase order to adequate internal control over purchase transactions.

Q: What are the three major factors that determine the sample size for

What are the three major factors that determine the sample size for an attributes sampling plan?

Q: Enumerate specific steps to be taken by the auditors to ascertain that

Enumerate specific steps to be taken by the auditors to ascertain that a client’s inventories have not been pledged or subjected to a lien of any kind.