Screenshot (145)

ss.

Please help me

You are conducting an audit and have obtained the following figures with respect to sales and accounts receivable:                                                                                  2021               2020            Accounts receivable $   3,760,000   $   2,950,000            Allowance for doubtful accounts $ 217,000 $ 211,000 Sales $ 25,850,000   $ 23,700,000                                                            Required: What are the audit implications of these figures? Identify key audit steps that you would perform for any of the above accounts.

Comprehensive Problem: Monetary Unit Sampling. Zachary Mayo is a new staff accountant participating in his first audit engagement. He has been assigned to the Foley Companyengagement and is examining Foley’s accounts receivable. Foley maintains a computerizedledger of its accounts receivable balances, which are recorded at $5,000,000 and comprise5,560 individual customer accounts.Mayo established the following parameters for use in this year’s audit. In so doing, herelied extensively on parameters established in prior audits:∙ Expected misstatement is established at $100,000, which is the average amount of misstatement identified in the past five audits. During the past year, Foley has experienced agreat deal of turnover among its sales processing personnel and has made some relativelylarge sales that present some unusual revenue recognition issues. In addition, accountsreceivable have increased by almost 15 percent from the prior year.∙ The tolerable misstatement is 10 percent of the…

Hardev

James Duffney, CPA, has randomly selected and audited a sample of 100 of Will-Mart’s accounts receivable. Will-Mart has 6,140 accounts receivable accounts with a total book value of $6,000,000. Duffney has determined that the account’s tolerable misstatement is $500,000. His sample results are as follows:   Average audited value $962 Average book value 970   Required: Calculate the accounts receivable estimated audited value and projected misstatement using the: a. Mean-per-unit method. b. Ratio method. c. Difference method.

You are auditing the accounts receivable for Conor Company as of December 31, 2022 One of your procedures was to send positive confirmations to a sample of 50 accounts.  Of those 50 confirmations, 40 have been positively confirmed without comments, 7 had minor differences that have been cleared satisfactorily.  The remaining 3 had the following comments:   “We received $6,000 of goods on consignment on November 20, 2022. We have not sold them yet.” “We received these goods on January 5, 2023 and mailed a check on January 7, 2023.” “The balance of $2,000 was paid on December 10, 2022.”   For each of these comments, identify the steps that you would take to clear (resolve) them.

Assume that a continuing audit client has recorded Accounts Receivable and Equipment both in the amount of $1,000,000. In a typical audit, which account would take more time to audit?

Comprehensive Problem: Monetary Unit Sampling. Dylan Mays is auditing the accountsreceivable of Channel Company. Channel’s accounts receivable were recorded at $2,000,000and comprised more than 1,500 customer accounts. However, Channel’s ten largest customers’ balances comprised a high percentage of the recorded accounts receivable (over$500,000, or 25 percent). As a result, Mays is considering the use of MUS.Based on prior audits and other judgments, Mays has established the following parameters: Risk of incorrect acceptance 5% Tolerable misstatement $120,000 Expected misstatement $ 24,000 Required:a. Briefly identify what factors Mays should consider in determining sample size and howthese factors would be assessed.b. Calculate the necessary sample size and sampling interval used by Mays in the audit ofChannel Company.c. Given the information in part (b), describe how Mays would select the sample fromChannel’s computerized accounts receivable ledger.d. [Note: Part (d) is…

You are auditing the accounts receivable for Conor Company as of December 31, 2021.  One of your procedures was to send positive confirmations to a sample of 50 accounts.  Of those 50 confirmations, 40 have been positively confirmed without comments, 7 had minor differences that have been cleared satisfactorily.  Two of the responses  had the following comments: a.  “We never received these goods.” b.  “The balance of $1,000 was paid on December 15, 2021.” For each of these comments, identify the steps that you would take to clear (resolve) them.

Assume that you have audited accounts receivable as of 12/31/2020 and are confident that the ending balance should be $7,188,000.  Further, you know that the audited balance as of 12/31/2019 was $8,462,000.  You also verified cash deposits from customers through a review of the bank account.  Based on that review you believe that cash receipts from customers ranges from an amount of $40,000,000 to $41,000,000.  Which amount below would represent an overstatement of revenue for the year ending 12/31/2020, based on the facts above? 1. $38,500,000 2. $41,000,000 3. $39,762,000 4. $39,100,000

A client has a separate sales group for its largest “preferred” customers, a select group of customers who normally make purchases in excess of $250,000 and often have accounts receivable balances in excess of $1 million. Which of the following audit procedures would the auditor most likely perform?a. Prepare a schedule of purchases and payments for these customers.b. Send out negative confirmations on a large sample of these customers.c. Inquire of the sales manager regarding the accounts receivable terms.d. Send out positive confirmations on a large sample of these customers.

PROBLEM 2 You are revisiting the audit working paper presented to you by your audit staff in line with his audit procedures done in auditing T-ara Corporation’s accounts receivable. The following were lifted from the said working papers:   Audit notes: T-ara Corporation’s accounts receivable subsidiary ledger had the following details: Customers Invoice Date Invoice Amount Balance Park Ji-yeon Inc. 12/06/22 127,000     10/29/22 84,000   211,000         Hyomin Company 12/30/22 42,000     09/27/22 30,000     08/20/22 53,520   125,520         Hahn Eunjung Inc. 12/30/22 40,000     12/08/22 80,000     11/25/22 63,600   183,600         Park So-yeon Company 11/17/22 138,840     10/09/22 132,000     08/20/22 74,400   345,240         Jeon Boram Corporation 12/10/22 250,000   250,000         Qri Incorporated 09/12/22 104,400   104,400 Total     1,219,760   The…

Upper Limit on Misstatements Calculation: Monetary Unit Sampling. The auditorsmailed positive confirmations on 60 customers’ accounts receivable balances. The company’saccounts receivable balance comprised 2,356 customer accounts with a total recorded balanceof $19,600,000, and the sampling interval was $280,000. The auditors received four positiveconfirmation returns reporting exceptions. Upon follow-up, they found the following:∙ Account 2333. Recorded balance $8,345. The account was overstated by $1,669 becausethe client made an arithmetic mistake recording a credit memo. The company issued only86 credit memos during the year. The auditors examined all of them for the same arithmetic mistake and found no similar misstatements.∙ Account 363. Recorded balance $7,460. The account was overstated by $1,865 because thecompany sold merchandise to a customer with payment due in six months plus 15 percentinterest. The billing clerk made a mistake and recorded the sales price and the…

The Bizayeva CPA firm is auditing Hagopian, Inc. The company is a manufacturer. It manufactures laptops and ships them to stores. The company had a good year, with (unaudited) $2,500,000 in accounts receivable at year-end. Bizayeva decides to test management’s assertion of the existence of this amount of accounts receivable by using Monetary Unit Sampling. Bizayeva decides, based on last year’s audit, on a 90% confidence level. Bizayeva expects the accounts receivable are misstated by $25,000. Bizayeva decides that a misstatement of as much as $100,000 is tolerable, for accounts receivable to be regarded as materially correct. What is the required sample size?

Assume that you are preparing to confirm accounts receivable at December 31, 2025, which is one month prior to the fiscal year - end of January 31, 2026. The book value of gross accounts receivable is $71,622, 804. Complete the following requirements related to the confirmation of receivables for Cloud 9 based on previous work and the following information Required:a. Using PPS sampling, determine the sample size that you want to use for sending accounts receivable confirmations. You make the following assumptions.You set tolerable misstatement for accounts receivable at $3,500,000. Expected misstatement = $750,000. Risk of incorrect acceptance = 37%. Given these parameters: 1. What do you calculate for sample size? 2. What do you calculate for the sampling interval?

Comprehensive Problem: Monetary Unit Sampling. Clint Walker was examiningthe accounts receivable of Country Music Inc. Its accounts receivable were recorded at$1,500,000. Based on past audits, Walker established tolerable misstatement at 10 percent ofthe recorded account balance and anticipated a very small level of misstatement in CountryMusic’s accounts receivable ($50,000). In his previous assessments of audit risk, risk ofmaterial misstatement, and analytical procedures risk, Walker had established a necessaryrisk of incorrect acceptance of 10 percent.Required:a. Calculate the sampling interval and sample size that Walker would use in the audit ofCountry Music.b. Reperform the calculations in part (a) if Walker had established a risk of incorrect acceptance of (1) 5 percent and (2) 20 percent. Based on your calculations, describe the relationship between the necessary level of the risk of incorrect acceptance and the samplesize and sampling interval.c. [Note: Part (c) is unrelated…

An auditor is using PPS Sampling to determine the projected error in Accounts Receivable. Two errors were discovered: Error #1: Book Value of $400, Audit Value of $100 Error #2: Book Value of $6,000, Audit Value of $2,000 The Sampling Interval was $2,000   Total Projected Error is: a. $2,100 b. $2,833 c. $4,300 d. $2,300 e. $5,500

3. A bank in Ottawa is considering a survey of its customers for the purpose of estimating the mean number of checks written per customer in each month. A sample of 360 customers was selected. The following sample values were recorded: = = 33.4 and s = 11.2. (a) Provide a 90% confidence interval estimate for the mean number of checks written per customer in each month and interpret the estimate. 1 (b) Suppose a mistake was made in counting the number of customers that was surveyed, and the actual sample size was 36 instead of 360. Recompute the 90% confidence interval estimate, and compare it to the estimate developed in part (a). Why are the estimates different even though the sample mean and standard deviation did not change? (c) The bank is interested in opening another branch in Ottawa. Its demographic studies indicate that the branch will attract about 2000 customers who will have checking accounts. The bank is attempting to prepare a system that would process the checks these…

Upper Limit on Misstatements Calculation: Monetary Unit Sampling. Jordan Thomas is using MUS to examine a client’s accounts receivable balance. Using a sample size of 100 items and a sampling interval of $12,300, Thomas identified the following misstatements: Item Recorded Balance Audited Value 1 $15,000 $12,500 2 10,000 4,000 3 3,000 2,000 Required:a. Calculate the upper limit on misstatements assuming a risk of incorrect acceptance of (1) 5 percent and (2) 10 percent.b. Based on your calculations in part (a), comment on the relationship between the risk of incorrect acceptance and the upper limit on misstatements.

The 1,000 accounts receivable of Gamco Company have a total book value of $20,000. Wilbur Schneitz, Certified Public Accountant (CPA), has selected and audited a sample of 50 accounts with a total book value of $900. Using nonstatistical variables sampling and the difference estimation technique, Smith has properly estimated a projected misstatement of an overstatement of $3,000 for the entire population. The total audited value of Schneitz’s sample is: 650 1000 750 900

Answer all parts. Part C is part of the 9-21 question

QUESTIONS:Based on the above and result of your audit, determine the following:The net adjustment to cash account on May 31,2018

V4. Hayden Corporation uses an enterprise resource planning (ERP) system. In their audit of receivables and revenues, the auditors have identified the following data elements in the corporation’s database that may be used for data analytics applications: Customer balance Customer credit limit and credit rating Customer total annual sales Customer purchases by date Customer returns by date Customer name Customer shipping address Required: a. Describe two data analytic applications that might be used to audit the existence of receivables and occurrence of sales. b. Describe one data analytic application that might be used to audit the valuation of receivables.