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Carl Monson, the owner of Major Products Manufacturing Company, a small, successful, longtime audit client of your firm, has requested you to work with his company in preparing 3-year forecasted information for the year ending December 31, 2012, and two subsequent years. Monson informs you that he intends to use the forecasts, together with the audited financial statements, to seek additional financing to expand the business. Monson has had little experience in formal forecast preparation and counts on you to assist him in any way possible. He wants the most supportive opinion possible from your firm to add to the credibility of the forecast. He informs you that he is willing to do anything necessary to help you prepare the forecast.First, he wants projections of sales and revenues and earnings from the existing business, which he believes can continue to be financed from existing capital.Second, he intends to buy a company in a closely related business that is currently operating unsuccessfully. Monson states that he wants to sell some of the operating assets of the business and replace them with others. He believes that the company can then be made highly successful. He has made an offer on the new business, subject to obtaining proper financing. He also informs you that he has received an offer on the assets he intends to sell.Requireda. Explain circumstances under which it is and is not acceptable to undertake the engagement.b. Why is it important that Monson understand the nature of your reporting requirements before the engagement proceeds?c. What information will Monson have to provide to you before you can complete the forecasted statements? Be as specific as possible.d. Discuss, in as specific terms as possible, the nature of the report you will issue with the forecasts, assuming that you are able to properly complete them.
Explain what the following five words mean to you non CPA audit, financial audit, compliance audit, operational audit, fraud audit
instructionsthe following is the secs accounting and auditing enforcement releases where a fraud and related industry
Why and by how much the staghorn inventory needs to be written-down (please justify the write-down; e.g. the Lower of Cost or Market; cite the AASB Handbook section; and show calculations to justify your amount).
Andrew and fulton inc. uses 780 cases of a chemical bonding agent each year. Monthly demand fluctuates between 50 and 80 tons. The lead time for each order is one month, and the economic order quantity is 130 tons.
The book value of inventory on the entity's records is $ 1,090,000. Overall materiality for the engagement is $ 500,000. Doug's policy is to use 50 percent or less of overall materiality as tolerable misstatement for any one account. x`x`
Improve control over stock ordering. A new system is required to manage this aspect of the business. The ability to order stock for the three businesses instead of individual ordering would ensure economies not being realised at the moment.
Internal control has gained increasing importance among management, external auditors, regulators, and others. Use a specific example that illustrates the answer.
What audit evidence is necessary for opining on a client's financial statements? How does audit documentation provide evidence related to audit quality?
Show why each of the five areas specified by the audit committee may or may not be suitable for this assurance engagement.
multiple choice1. the global organizational hierarchy goh can include all of the following excepta. divisionsb.
Which of the following BEST describes why auditing can be viewed as a cyclical process? Which of the following BEST describes why auditors must maintain independence
performance audits are often far removed from financial audits but even seemingly unauditable programs can be
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