Based on the Company and Its Environment,including Its Internal Control,the

question 45

Essay

Based on the company and its environment,including its internal control,the auditors assessed the risk of material misstatements to the financial statements,whether due to error or fraud,and designed the nature,timing,and extent of further audit procedures to be performed.
As a result of conducting the above risk assessment procedures,the audit plan for year 2 includes the following changes from the audit plan for year 1.The company has a calendar year-end and operates only on weekdays.
In conducting the audit procedures for the search for unrecorded liabilities,the materiality/scope for this area was assessed by the auditors at $6,000.Adjustments are only recorded for items equal to,or exceeding materiality.The last day of fieldwork is estimated to be February 1,year 3.
For the items reflected in the following check register,which are not recorded in the accounts payable subsidiary ledger at December 31,year 2,determine if each potential liability is recorded in the proper accounting period and also determine the amount that should be journalized,if any.If no action is required,you must enter $0.
For each of the check numbers in the table below,select if any action or adjustment is required. If no action is required,put $0 in the amount column;if an adjustment is needed select the dollar amount.Each selection may be used once,more than once,or not at all.
Check Register

 

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Definitions:

Z-Score

A statistical measure that describes a value's relationship to the mean of a group of values, measured in terms of standard deviations from the mean.

Stockbrokers

Professionals who buy and sell stocks and other securities for clients in exchange for a fee or commission.

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A measurement unit indicating the amount of time allocated or spent on activities within a 24-hour period.

Homework

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