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Below and on page 278 are statements of earnings and financial position for Wexler Industries. a. Use professional judgment in deciding on the preliminary judgment about materiality for earnings, current assets, current liabilities, and total assets. Your conclusions should be stated in terms of percents and dollars.b. Assume that you define materiality for the financial statements as a whole as a combined misstatement of earnings from continuing operations before income taxes of 5%. Also assume that you believe there is an equal likelihood of a misstatement of every account in the financial statements, and each misstatement is to result in an overstatement of earnings. Allocate materiality to these financial statements as you consider appropriate.c. As discussed in part b., net earnings from continuing operations before income taxes was used as a base for calculating materiality for the Wexler Industries audit. Discuss why most auditors use before tax net earnings instead of after tax net earnings when calculating materiality based on the income statement.d. Now, assume that you have decided to allocate 75% of your preliminary judgment to accounts receivable, inventories, and accounts payable because you believe all other accounts have a low inherent and control risk. How does this affect evidence accumulation on the audit?e. Assume that you complete the audit and conclude that your preliminary judgment about materiality for current assets, current liabilities, and total assets has been met.The actual estimate of misstatements in earnings exceeds your preliminary judgment. What should you do?
Criticism of sarbanes-oxley act 2002 do not believe the act will be effective at deterring accounting frauds because it primarily relies on specifying new crimes and higher penalties( increasing the maximum fine and prison terms).
What is your view, giving a rational explanation to your view (you may use other sources to support your view, properly referencing). Why do you think that these measures were introduced?
Make sure you cover whether an adjustment and or disclosure is required. You may need to consider also looking at accounting/auditing standards related to the specific items in each scenario.
What procedure is being run in this situation and This will affect the population. Use the examples from the lecture and YouTube to help you project the misstatement.
questionsally and bob unmarried taxpayers each owned 50 of lostalot inc. an s corporation. the corporation had a 50000
To identify principal audit risk and corresponding audit procedures
Briefly outline the requirements of the UK version of ISA 700/ 750/ 706 and discuss the factors which would influence you as the external auditor in forming an opinion on the financial statements of Home Retail Group plc for 2011.
How would you propose that generally accepted accounting principles (GAAP) should be developed and enforced in comparison with how the principles are now developed?
Propose a broad audit plan
The audit partner on this engagement for the last 3 years has been James Underwood and identify if any of the above would prevent the audit firm from accepting the engagement.
Stanley Printing Company began operation in March with three custom orders. The following costs were incurred during the month.
A credit memo in the bank statement shows a bank collection of a note for $1,300 with interest received of $16. This item was dated 18th May.
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