Understanding the Client's Processes

question 42

Essay

Understanding the client's processes
You are on the audit team of Buckner and Halston,LLP.Your firm as has accepted Boris Spyder,Inc. ,a manufacturer of fish food.What are some methods you will use in order to understand the business and accounting processes of Boris?

Identify and categorize accounts as asset, liability, or equity and their normal balances.

Analyze transactions involving sales tax and determine the correct journal entries.

Distinguish between a discount period and a credit period and their impact on cash flow and sales revenue.

Evaluate the impact of merchandise returns on financial statements.

---

Definitions:

Superordinate Goals

Objectives that require the cooperation of two or more parties with typically conflicting interests, thus promoting collaboration between them.

Dominate

To have control or exert power over; often implies overpowering or leading others in a particular context or situation.

Outgroup

Any group with which an individual does not identify or feel a part of, often viewed with prejudice or hostility.

Stereotype Content Model

A social psychology theory suggesting that stereotypes along two dimensions, warmth and competence, determine our feelings towards social groups.