Questions from Auditing and Assurance

Q: Kadex Corporation, a small manufacturing company, did not use the

Kadex Corporation, a small manufacturing company, did not use the services of independent auditors during the first two years of its existence. Near the end of the third year, Kadex retained Jones & S...

Q: Allen Fraser was president of three corporations: Missouri Metals Corporation,

Allen Fraser was president of three corporations: Missouri Metals Corporation, Kansas Metals Corporation, and Iowa Metals Corporation. Each of the three corporations owned land and buildings acquired...

Q: Your new client, Ross Products, Inc., completed its first

Your new client, Ross Products, Inc., completed its first fiscal year March 31, 20X4. During the course of your audit you discover the following entry in the general journal, dated April 1, 20X3. R...

Q: Auditors report on the consistency of application of accounting principles. Assume

Auditors report on the consistency of application of accounting principles. Assume that the following list describes changes that have a material effect on a client’s financial statements for the curr...

Q: Shortly after you were retained to audit the financial statements of Case

Shortly after you were retained to audit the financial statements of Case Corporation, you learned from a preliminary discussion with management that the corporation had recently acquired a competing...

Q: Auditors usually send confirmations to obtain evidence about accounts receivable and accounts

Auditors usually send confirmations to obtain evidence about accounts receivable and accounts payable. a. Is confirmation presumptively required for accounts receivable, accounts payable, or both? b....

Q: In the course of your initial audit of the financial statements of

In the course of your initial audit of the financial statements of Sylvan Company, you determine that of the substantial amount of accounts payable outstanding at the close of the period, approximatel...

Q: The subsequent period in an audit is the time extending from the

The subsequent period in an audit is the time extending from the balance sheet date to the date of the auditors’ report. Discuss the importance of the subsequent period in the audit of trade accounts...

Q: Early in your first audit of Star Corporation, you notice that

Early in your first audit of Star Corporation, you notice that sales and year-end inventory are almost unchanged from the prior year. However, cost of goods sold is less than in the preceding year, an...

Q: During the course of any audit, the auditors are always alert

During the course of any audit, the auditors are always alert for unrecorded accounts payable or other unrecorded liabilities. Required: For each of the following audit areas, (1) describe an unrecor...