
a.
Determine the expected value from the given information.
a.

Explanation of Solution
Audit Evidence: The piece of evidence provided by the audit team to prove their opinion with respect to the audit is known as audit evidence. It includes accounting information related to the evidence and their source.
Determine the expected value.
Account | Expected value |
Executive salaries | |
Factory hourly payroll |
Increase due to 3% pay rate increase: Increase due to 8% increased production: |
Factory supervisors’ salaries | |
Office salaries | |
Sales commissions |
Increase in commissions due to increased sales: |
Table (1)
b.
Compute the difference between the own expectation and client’s recorded amounts as percentage.
b.

Explanation of Solution
Compute the difference between the expectation and client’s recorded amounts as percentage.
Account | DIFFERENCEIN EXPECTEDAND RECORDED |
Executive salaries | |
Factory hourly payroll | |
Factory supervisors’ salaries | |
Office salaries | |
Sales commissions |
Table (2)
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Chapter 7 Solutions
Auditing And Assurance Services
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