EBK PRINCIPLES OF AUDITING & OTHER ASSU
21st Edition
ISBN: 9781260299434
Author: WHITTINGTON
Publisher: YUZU
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Question
Chapter 16, Problem 36QRA
a.
To determine
Explain how the auditor using the iron curtain approach can determine the requirement of adjustment.
b.
To determine
Explain how the auditor using the rollover approach can determine the requirement of adjustment.
c.
To determine
Describe the requirement of SEC Staff Accounting Bulletin No. 108 under the given situation.
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Students have asked these similar questions
Pat Colt is auditing the financial statements of Manning Company. The following is a summary of the uncorrected
misstatements that Colt has identified during the past three years. These misstatements are immaterial and have
related to isolated matters. In this summary, parentheses imply that the misstatements would have reduced balances if
they had been corrected (e.g., in 2020, the misstatements would have reduced net income by $82,500, assets by
$100,000, liabilities by $17,500, and equity by $82,500 if corrected).
Year
2020
2021
2022
Effect on Net
Income
$ (82,500)
(22,000)
30,000
Effect on
Assets
$ (100,000)
(25,500)
30,000
Effect on
Liabilities
$ (17,500)
(3,500)
0
During the most recent audit, Colt concluded that expenses totaling $130,000 were recognized in January 2024 (when
Manning paid them) but should have been recognized in 2023.
Required:
a. What is the dollar impact of the misstatement identified in 2023 on each of the following (assume a 21% tax rate for
Manning)?
Note:…
For the following independent situations, assume that you are the audit partner on the engagement:
1. The client recorded impairment of goodwill for $40,000 last year. It recorded reversal of impairment in goodwill for $20,000 this year after considering the carrying amount and recoverable amount of the cash generating unit. Net income is $10,000 in current year.
Discuss the most appropriate type of opinion the auditor should issue. Explain briefly the reason for the opinion.
aya de jesus, cpa, is the continuing auditor of various fabrics, inc. the current year-end is january 31, 20x5. last year's audit report contained an explanatory paragraph because of uncertainty regarding the ability of various fabrics to continue as a going concern. the company had defaulted on two major loan agreemens, and appeared to be losing the race to develop "space age"fabrics. since the date of the last year's audit report, however, company management has changed. significant new prodcuts, which already have proven successful in the markets served by various fabrics, have been developed. creditors have agreed to major debt restructuring agreements, and the company appears to be öut of he woods."
Required
Assuming the company presents comparative financial statements for 20x5 and 20x, present the audit report. remeber, you are updating not reproducing - last year's audit report
Chapter 16 Solutions
EBK PRINCIPLES OF AUDITING & OTHER ASSU
Ch. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Identify three items often misclassified as...Ch. 16 - Prob. 4RQCh. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - What safeguards should be employed when the...
Ch. 16 - You are asked by a client to outline the...Ch. 16 - Prob. 12RQCh. 16 - Prob. 13RQCh. 16 - Prob. 14RQCh. 16 - Prob. 15RQCh. 16 - What are loss contingencies? How are such items...Ch. 16 - Prob. 17RQCh. 16 - Prob. 18RQCh. 16 - Prob. 19RQCh. 16 - What is the meaning of the term commitment? Give...Ch. 16 - Prob. 21RQCh. 16 - What are subsequent events?Ch. 16 - Describe the manner in which the auditors evaluate...Ch. 16 - Prob. 24RQCh. 16 - Prob. 25RQCh. 16 - Prob. 26RQCh. 16 - In your audit of the financial statements of Wolfe...Ch. 16 - Prob. 28QRACh. 16 - Prob. 29QRACh. 16 - Prob. 30QRACh. 16 - Prob. 31QRACh. 16 - The auditors opinion on the fairness of financial...Ch. 16 - Prob. 33QRACh. 16 - Prob. 34QRACh. 16 - Prob. 35QRACh. 16 - Prob. 36QRACh. 16 - Prob. 37AOQCh. 16 - Prob. 37BOQCh. 16 - Prob. 37COQCh. 16 - When auditing the statement of cash flows, which...Ch. 16 - The search for unrecorded liabilities for a public...Ch. 16 - The aggregated misstatement in the financial...Ch. 16 - Prob. 37GOQCh. 16 - Prob. 37HOQCh. 16 - Prob. 37IOQCh. 16 - Prob. 37JOQCh. 16 - Prob. 37KOQCh. 16 - Which of the following events occurring on January...Ch. 16 - Prob. 38OQCh. 16 - Prob. 39OQCh. 16 - Prob. 40OQCh. 16 - Match the following terms to the appropriate...Ch. 16 - Prob. 42OQCh. 16 - Prob. 43PCh. 16 - Prob. 44PCh. 16 - Prob. 45PCh. 16 - Prob. 46PCh. 16 - Prob. 47PCh. 16 - Prob. 48PCh. 16 - The audit staff of Adams, Barnes Co. (ABC), CPAs,...Ch. 16 - Prob. 50RDC
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