CON 7020 Overhead Should Cost Review Exam

Which of the following goals is accomplished when an audit process occurs at the end of the budget year? Select all that apply.   Preventing fraud and waste   Ensuring the accuracy of operation   Ensuring compliance with policies and applicable laws   Interviewing and hiring budget personnel for the next budget year

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Large audits are usually split into two phases. Close to the end of the year interim audits consisting of transaction testing and system assessment work are carried out. The final audit takes place after the year end and this involves testing of items of statement of financial position and the balance of the work. Required:  (a). Identify FOUR key benefits that may arise as a result of spreading the audit work across interim audit and final audit.                                                                                (b). Explain FOUR audit procedures required to be carried out during final audit and audit procedures carried out during Interim Audit.                                                    (c). According to ISA 300, certain procedures must only be performed at or after a year end. Identify TWO of these procedures.

CVP Analysis in a Professional Service Firm Leary and O’Donnell, a local CPA firm, has beenasked to bid on a contract to perform audits for three counties in its home state. Because existing staffare fully scheduled, if the firm is awarded the contract, it must hire one new staff member at a salaryof $52,000 to handle the additional workload. The managing partner is convinced that obtaining thecontract will lead to additional new clients from the respective counties. Expected new work (excluding the three counties) is 750 hours at an average billing rate of $90.00 per hour. Other informationfollows about the firm’s current annual revenues and costs:Firm volume in hours (normal) 30,750Fixed costs $575,000Variable cost $35.00/hrShould the firm win the contract, the audits of the three counties will require 950 hours ofexpected work.Required1. If the managing partner’s expectations are correct, what is the lowest bid the firm can submit and stillexpect to increase annual net income? What…

Question 3: (35 Marks) As the in-charge senior auditor on the audit engagement for JA Tire Manufacturing for the year ended December 31, 2019, you are responsible for auditing the revenue cycle. The manager has instructed you to read JA Tire Manufacturing system provided on the first tab of the Excel file "Appendix 1_JATireSales_Data" before attempting this audit to familiarize yourself with the sales process and the relevant worksheets and terminology. This file contains sales transaction information for the year ended December 31, 2019. JA Tire has four sales divisions within Canada and sells primarily to large tire companies with regional warehouses that subsequently distribute to local retailers. Based on some of the risk assessment procedures already performed, you identified risks related to the fact that salespersons receive a commission on sales to distributors and the commission is calculated on a monthly basis. Your manager has asked you to perform analytical procedures as a…

Q: Applied with audit risk model for planning Identify and explain SIX audit risks that exist in the audit of Hope-well Limited?

23-23 (OBJECTIVES 23-4, 23-8) The field work for the June 30, 2019, audit of Tracy Brewing Company was finished August 19, 2019, and the completed financial statements, accompanied by the signed audit reports, were mailed  September 6, 2019. In each of the highly material independent events (a. through h.), state the appropriate action (1 through 4) for the situation and justify your response. The alternative actions are as follows:1. Adjust the June 30, 2019, financial statements.2. Disclose the information in a footnote in the June 30, 2019, financial statements.3. Request the client to recall the June 30, 2019, statements for revision.4. No action is required.The events are as follows:a. On December 14, 2019, the auditor discovered that a debtor of Tracy Brewing went bankrupt on July 15, 2019, due to declining financial health. The sale generating the receivable had taken place January 15, 2019.b. On December 14, 2019, the auditor discovered that a debtor of Tracy Brewing went…

Consider the following material and independent situations (i) to (iii) below.In each situation, the following dates apply:• Balance date: 30 June 2021• Date of audit report: 16 August 2021• Audited financial report and audit report sent to shareholders: 23 August 2021• Annual general meeting: 30 September 2021(i) The client purchased raw materials that were received before the financial year end. The purchase was recorded based on its estimated value. The supplier’s invoice, received on 30 July 2021, showed that the cost was substantially different from the estimated value.(ii) On 10 August 2021, the directors signed a contract to upgrade the client’s airconditioning system. The first payment of $100,000 is due on 1 September 2021. Work will be completed by 30 June 2022, and the final contract payment will be made at that time.(iii) On 25 August 2021, the general manager informed you that on 18 August 2021 the directors decided to sell land that the client was holding as a long-term…

Chapter 7 of the textbook presents some concerns regarding the current accounting standards for research and development expenditures. Instructions: For this discussion, you will be divided into two groups: Group B: You are assigned to Group B if you have a last name beginning with N-Z.  Assume that you are the FASB member. Write a memo defending the current standards regarding research and development. For both groups, your memo should address the following questions: By requiring expensing of R&D, do you think companies will spend less on R&D? Why or why not? What are the possible implications for the competitiveness of U.S. companies? If a company makes a commitment to spend money for R&D, it must believe it has future benefits. Shouldn't these costs therefore be capitalized just like the purchase of any long-lived asset that you believe will have future benefits? Explain your answer. For your initial post, indicate in the subject line which group you are in (Group A…

Write a memo to the CFO, Hans, informing him about the coming public school Annual Audit. Discuss the importance of the audit and some of the things the auditors will review during their field work. Your response should be approximately one page.

Cases: 1. Staff accountants’ working papers are reviewed within one week of being completed. 2. The partner in charge annually selects at random five engagements and evaluates whether quality control procedures were followed. 3. No uncertainty must exist as to whether a new client is a going concern. 4. To be in-charge auditor on audits involving more than four hundred work hours, staff must have previously worked on an engagement in the industry. 5. New staff accountants must be eligible to sit for the CPA exam. 6. In-charge accountants must have passed the CPA exam. 7. As they are issued, new PASs are discussed with staff.8. A technical assistance staff is available to answer accounting and auditing questions. 9. Staff must sign a statement annually that indicates their stock ownership.Required: a. State the quality control element on which the policy relates b. State the objective/purpose of each policy.

Which of the following are required by the Sarbanes Oxley Act? Check all that apply. O The company's annual report must contain the CEO's assessment of the company's internal controls O Audit firms must rotate off a client every 5 years OCFOS must consult with the audit committee before hiring an auditor O Companies must develop and enforce a code of ethics

The Sarbanes-Oxley Act (SOX) requires that an auditor must issue an internal control report following the evaluation of internal controls. provide continuous consulting services to help prevent fraud. issue a sustainability report along with the internal control report. rotate who can lead an audit every three years.

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CASE STUDY: HARRISONS LTD You are a new staff member of Monet & Associates, a mid-sized accounting firm and have been assigned to an engagement team that is conducting the financial report audit for Harrisons Ltd (Harrisons). The engagement team, under the guidance of the engagement partner, Vince Mater, is currently performing a preliminary risk assessment of the audit client. The following documents have been provided to you: Memo from audit partner, Vince Mater, dated 6thJanuary 2020 which includes a summary of the initial audit procedures undertaken by the engagement partner for the 31 December 2019 audit. A relevant industry outlook report provided by the Australian Construction Industry Forum published on 7 November 2019.   REQUIRED: You have been asked to assess the inherent risk of the client and perform preliminary analytical procedures as part of the audit planning process in obtaining an understanding about the client’s business and indicate where there is an increased…

) Generally, post-audits are conducted for large projects:A. shortly after the completion of the project B. after several years after the completion of the project C. shortly after the project has begun to operate D. well before the start of the project

Your client portfolio as an audit manager at CC & Co also includes TT Co which is a listed financial institution offering loans and credit facilities to both commercial and retail customers. You have received an email from the audit supervisor who is currently supervising interim testing on systems and controls in relation to the audit for the year ending 31 October 2018. The email gives the following details for your consideration: One of the audit team members, Jones, has provisionally agreed to take out a loan with Thomas Co to finance the purchase of a domestic residence. The loan will be secured on the property and the client’s business manager has promised Jones that he will ensure that she gets ‘the very best deal which the bank can offer.’ The payroll manager at TT Co has asked the audit supervisor if it would be possible for CC & Co to provide a member of staff on secondment to work in the payroll department. The payroll manager has struggled to recruit a new…

You are the audit senior responsible for the audit of Sampson Limited. You are currently planning theaudit for the year ended 31 December 20X7. During your initial planning meeting held with thefinancial controller, he told you of the following changes in the company’s operations.(i) Due to the financial controller’s workload, the company has employed a treasurer. The financialcontroller is excited about the appointment because in the two months that the treasurer hasbeen with the company he has realised a small profit for the company through foreign-exchangetransactions in yen.(ii) Sampson has planned to close an inefficient factory in country New South Wales before the endof 20X7. It is expected that the redeployment and disposal of the factory’s assets will not becompleted until the end of the following year. However, the financial controller is confident thathe will be able to determine reasonably accurate closure provisions.(iii) To help achieve the budgeted sales for the year,…

You are the audit senior responsible for the audit of Sampson Limited. You are currently planning theaudit for the year ended 31 December 20X7. During your initial planning meeting held with thefinancial controller, he told you of the following changes in the company’s operations.(i) Due to the financial controller’s workload, the company has employed a treasurer. The financialcontroller is excited about the appointment because in the two months that the treasurer hasbeen with the company he has realised a small profit for the company through foreign-exchangetransactions in yen.(ii) Sampson has planned to close an inefficient factory in country New South Wales before the endof 20X7. It is expected that the redeployment and disposal of the factory’s assets will not becompleted until the end of the following year. However, the financial controller is confident thathe will be able to determine reasonably accurate closure provisions.(iii) To help achieve the budgeted sales for the year,…