The auditor was unable tO confirm from the Bills receivable amounted OMR 250,000 by communicating with the Sundry debtc or customers. What type of Audit opinion should be expressed by the auditor in this situation? Unmodified opinion Qualified opinion Disclaimer of opinion Adverse opinion. Next r

The auditor was unable tO confirm from the Bills receivable amounted OMR 250,000 by communicating with the Sundry debtc or customers. What type of Audit opinion should be expressed by the auditor in this situation? Unmodified opinion Qualified opinion Disclaimer of opinion Adverse opinion. Next r

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter13: Auditing Debt, Equity, And Long-term Liabilities Requiring Management Estimates

Section: Chapter Questions

Problem 25CYBK

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Part I: The following issues listed below were not discovered by your audit team member. Required: Identify the one assertion that BEST pertains to each undiscovered issue. Explain why the assertion you selected pertains to each issue. (1 sentence each). Issue, Assertion, and Explanation 1. The allowance for bad debt account (part of the net accounts receivable balance per the balance sheet) differs significantly from the audit team's estimated range. 2. An accounts receivable confirmation indicated that the customer did not have an account with the company 3. Service revenue recorded was never performed. 4. Checks from customers received in the mailroom were never recorded and deposited. 5. Some inventory in the warehouse appears to be obsolete. 6. Sales transactions made at the beginning of the following fiscal year were recorded and reported in the prior year income statement. 7. Confirmations indicated that there were liens and other restrictions on accounts receivable. 8. Cash…
Question 4 Respond to each of the following independent situations involving auditor reports. For each scenario (1)identify the reporting issue involved; (2) explain the type of opinion that should be issued; (3) identify any requiredmodifications of the standard auditor'sreport. The auditor has a disagreem ent with a client overthe adequacy of the recorded bad debt expense and allowance for doubtful accounts. The auditor is convinced that the expense and allowance are understatedby amaterial (but not highly material) amount, but the client has refused to adjust the accounts. 1.4 The auditor has issued a report on a client's financial statem ents prepared on a regulatory basis of accounting. The auditor is also preparing to issue a separate report- on the same client's GAAP financial statements, which will be issued to the public. The auditor feels that the issuance of the report on the regulatory basis statements should be disclosed in the report on the GAAP statements. The auditor…
If an auditor assigns a tolerable misstatement of $1,000 to accounts payable, he or she would need to obtain less audit evidence for that account than if $100,000 had been assigned. * True O False
True or False1. When the auditor seeks evidence concerning the allowance for doubtful accounts he or she would most likely use an aged trial balance to help identify past due balances. 2. Current auditing standards do not require the confirmation of receivables if accounts receivable are not material. 3. Accounts receivable confirmations should be prepared on the auditing firm's letterhead. 4. Alternative procedures to the confirmation of receivables include review of subsequent collections and examination of supporting documents. 5. Lapping of accounts receivable is least likely to occur when there is an inadequate segregation of duties. 6. Positive accounts receivable confirmations should be used on all accounts which represent small immaterial balances. 7. When the client has a large number of relatively small accounts receivable and the assessed level of control risk for receivables and related revenue transactions is high, the auditor is more likely to use negative…
If an auditor assigns a tolerable misstatement of $1,000 to accounts payable, he or she would need to obtain less audit evidence for that account than if $100,000 had been assigned. * True False TOSHIBA
If the auditor verifies a debtor’s account balance, which is comprised of a number of transactions, at the end of the financial period by sending a debtor’s confirmation request, this is an example of a Select one: A. substantive test of transactions B. test of controls C. substantive analytical procedure D. substantive test of balances
Answer the following subquestion as a result of an audit: a. How much is the correct carrying value of the notes payable as of December 31, 2023? b. How much is the correct interest expense that Meekah should recognized in the December 31, 2023 statement of comprehensive income? c. How much of the note is reported in the non-current liability section of the December 31, 2023 statement of financial position?
PCAOB standards are used to conduct the audit for public companies. * True False If an auditor assigns a tolerable misstatement of $1,000 to accounts payable, he or she would need to obtain less audit evidence for that account than if $100,000 had been assigned. * True False An engagement letter establishes a clear understanding of the terms of the engagement between the client and the auditor. * True False
which of the following application would an auditor apply to determine the probability of a corporation's account balance being in error? A) overinvolvement rations B) probability rules C) bayes theorem D) emprical formula
Items 1 through 6 are questions typically found in a standardinternal control questionnaire used by auditors to obtain an understanding of internalcontrol for notes payable. In using the questionnaire for a client, a “yes” response indicatesa possible internal control, whereas a “no” indicates a potential deficiency.1. Are liabilities for notes payable incurred only after written authorization by a propercompany official?2. Are paid notes cancelled and retained in the company files?3. Is a notes payable master file maintained?4. Is a periodic reconciliation made of the notes payable master file with the actualnotes outstanding by an individual who does not maintain the master file?5. Is the individual who maintains the notes payable master file someone other thanthe person who approves the issue of new notes or handles cash?6. Are interest expense and accrued interest recomputed periodically by an individualwho does not record interest transactions?a. For each of the preceding…
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Question 4 If the auditor obtains sufficient evidence on a client's accounts receivable balance through alternative procedures because it is impractical to confirm accounts receivables, the auditor's opinion should be unqualified and could expect to: disclose the fact that alternative procedures were used due to client imposed restrictions. Avoid mentioning the alternative procedures disclose in the audit opinion that confirmation of accounts receivables was impracticable include a paragraph that discloses the performance of the alternative procedures