How to estimate the value of error against the entire trade

Assignment Help Financial Accounting

Reference no: EM132793735

Case study Joahim Gauss S.C.

Joahim Gauss is the limited partnership of the auditors, during the audit of Kurnik Polski Pls, there were randomly selected 25 balances of the clients and agreed to the supporting documentation and confirmation the errors identified are shown below:

Customer Balance as per client Balance as per auditor Difference

Kowalski s.a. 58221 597595 -15378

RTDT s.a. 890111 912924 -22814

Oramas sp. z o.o. 379564 286505 -93059

Kariabik s.c. 827956 860679 -32723

Topola s.kom. 42953 178808 -135855

Wyjscie s.a. 660065 665256 5190

Element s.c. 869434 842310 27124

Kostrzewa Adam 331267 352151 -20884

John Smith 166144 141369 24775

Sum 4749712 4837597 -263623

Total value of the trade debtors amount to €8 276 345,25; value in sample 5 123 437. Total value of receivables disclosed on the face of the balance sheet amount to € 8 076 245,25.

Engagement materiality is €1.7 million, tolerable error €1million, the SAD limit is €100k.

You are required to:

Problem 1: Show the value of identified error and describe how to estimate the value of error against the entire trade debtors. Approximate the total value of errors in all trade debtors' population. Assess the appropriateness of the debtor's provision.Point out the different audit procedures you might apply to trade debtors to ensure fairness of the total population.

Reference no: EM132793735

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