ACC621 Issues in Auditing Practice

Published : 22-Sep,2021 | Views : 10

Question:

Complete an analytical review using the trial balance,
Make a preliminary judgement of materiality,
Use the analytical review and materiality assessment to identify accounts that are at-risk of material misstatement.
Consider whether there are any accounts that should be selected regardless of their quantitative materiality, including:
o At least one account that may be at-risk of fraud, and
o At least one account that may require significant audit
attention for qualitative reasons other than fraud-risk.

Provide a brief rationale for the selection of each of the 6 accounts. For each account that you have selected, identify one assertions that is at risk (i.e. identify 7 assertions in total). Please include an explanation as to why the assertions are at risk.For each account/assertion briefly explain an audit procedure that could provide evidence relevant to the assertion.

Answer:

Revenues	Amount
Sales Revenue	$1,15,471
Other Revenue	$34,591
Cost of Sales	$35,613
Employee Benefit Expense	$32,996
Administration Expense	$1,056
Cash and Cash Equivalents	$70,000
Accounts Receivable	$1,20,750
Inventories	$1,85,000
Machinery	$71,000
Accumulated Depreciation	($28,827)
Motor Vehicle	$66,000
Accumulated Depreciation	($25,416)
Furniture	$7,400
Accumulated Depreciation	($2,640)
Sales Revenue	$1,87,450
Other Revenue	$57,050
Cost of Sales	$63,595
Employee Benefit Expense	$57,770
Administration Expense	$5,425
Amortization and Depreciation	$15,738