As the auditor for Company A, you discover that a material sale ($500,000 sale; cost of goods of $300,000) was made to a customer this year. Because of poor internal accounting controls, the sale was never recorded. Your client makes a management decision not to bill the customer because such a long time has passed since the shipment was made. You determine, to the best of your ability, that the sale was not fraudulent. Using the framework for ethical decision making, determine whether the auditor should require either a recording or a disclosure of the sales transaction. Instructions: Using the framework for ethical decision making, determine whether the auditor should require either a recording or a disclosure of the sales transaction. Please make sure to use at least 100 words in your response. Once you give your response, please respond to at least two of your peers using at least 50 words in your responses. Remember to follow the netiquette guidelines found in the course syllabus (under the 'Start Here' tab). Hint: A recording is a transaction (a journal entry that requires a debit and credit) on the books. A disclosure is a note on the financial statements that does not require a journal entry. Use the illustration below to help you in your answer.
As the auditor for Company A, you discover that a material sale ($500,000 sale; cost of goods of $300,000) was made to a customer this year. Because of poor internal accounting controls, the sale was never recorded. Your client makes a management decision not to bill the customer because such a long time has passed since the shipment was made. You determine, to the best of your ability, that the sale was not fraudulent. Using the framework for ethical decision making, determine whether the auditor should require either a recording or a disclosure of the sales transaction.
Instructions:
Using the framework for ethical decision making, determine whether the auditor should require either a recording or a disclosure of the sales transaction. Please make sure to use at least 100 words in your response. Once you give your response, please respond to at least two of your peers using at least 50 words in your responses. Remember to follow the netiquette guidelines found in the course syllabus (under the 'Start Here' tab).
Hint: A recording is a transaction (a
Use the illustration below to help you in your answer.
Auditing in Misstatement
The purpose conducting the auditing in the organisation to identified and acquire required information / evidence which are pertaining with the misstatement in auditing as well. It is the duty and responsibility of the auditors to acquire more evidence which are incurred in the material misstatement in the organisation as well. This will helpful to the auditors to make more viable financial reporting system and ensures that error free in any sort of material misstatement and other related factors as well.
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