When the Auditor Needs Additional Evidence to Verify Specific Assertions

question 5

Essay

When the auditor needs additional evidence to verify specific assertions or disclosures, what are the types of analytical procedures the auditor may choose and what factors affect the choice?

Understand the units-of-production method of depreciation.

Understand the double-declining-balance method of depreciation.

Understand the sum-of-the-years-digits method of depreciation.

Calculate annual depreciation expenses for various types of assets.

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Definitions:

Cash Receipts

The money received by a business during a given period, from transactions such as sales, debt collections, or asset sales.

Cash Payments

Payments made in the form of actual cash as opposed to digital transactions or checks.

Financial Statement

Documents that present the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.

Balance Sheet

An accounting document detailing a firm's resources, debts, and equity held by shareholders, capturing its financial status at a particular instant.