1     CMN Ltd is a small company offering online advertising and marketing services. You are auditing their expense accounts for the year ended 30 June 2022. The owner often takes his family (wife and three kids) for a holiday when travelling on business trips to meet with clients. The expenses relating to the meetings with clients are recognised under the company’s expenses. On June 28, the owner and his family returned from a three-week trip around Australia for a holiday and to meet with potential clients.   Identify and explain two key assertions at risk for the expense accounts.   For each assertion, describe one substantive test of detail that you would undertake.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

1

 

 

CMN Ltd is a small company offering online advertising and marketing services. You are auditing their expense accounts for the year ended 30 June 2022. The owner often takes his family (wife and three kids) for a holiday when travelling on business trips to meet with clients. The expenses relating to the meetings with clients are recognised under the company’s expenses. On June 28, the owner and his family returned from a three-week trip around Australia for a holiday and to meet with potential clients.

 

Identify and explain two key assertions at risk for the expense accounts.

 

For each assertion, describe one substantive test of detail that you would undertake.

Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Personal Financial Statements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education