Internal auditors for a federal agency

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Reference no: EM13151994

You were in the final stages of your audit of the financial statements of Scott Corporation for the year ended December 31, 20X0, when you were consulted by the corporation's president, who believes there is no point to your examining the 20X1 vpicjer regoster amd testing data in support of 20X0 entries. He stated that (1) bills pertaining to 20X0 that were received too late to be included in the December voucher register were recorded as of the year-end by the corporation by journal entry, (2) the internal auditors made tests after the year-end, and (3) he would furnish you with a letter representing that there were no unrecorded liabilities.

a) Assume that the client company, which handled some government contracts, had no internal auditors for a federal agency spent three weeks auditing the records and were just completing their work at this time. How would the independent auditors' unrecorded liability test be affected by the work of the auditors for a federal agency?

b) What sources in addition to the 20X1 voucher register should the independent auditors consider to locate possible unrecorded liabilities?

Reference no: EM13151994

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