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)
Want to see more full solutions like this?
Chapter 7 Solutions
AUDITING+ASSURANCE 12MONTH ACCESS CARD
- I am searching for a clear explanation of this financial accounting problem with valid methods.arrow_forwardProvide answerarrow_forwardRivana Co. has a beginning receivables balance on March 1 of $1,280. Sales for March through June are $790, $860, $1,150, and $2,050, respectively. The accounts receivable period is 30 days. What is the amount of the May collections? Assume a year has 360 days.arrow_forward
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
- Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning



