Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Pinnacle Manufacturing: Part VI 50 marksPart VI of the Pinnacle Manufacturing case covers analytical procedures and tests of details of balances for accounts payable.Assume that the understanding of internal controls over acquisitions and cash payments, and the related tests of controls and substantive tests of transactions support an assessment of a low control risk. The accounts payable listing at year-end shows 519 accounts, making up the accounts payable balance of $11,277,989 at 31 December 20X2. Accounts payable balances between $50,001 and $200,000 total $4,075,355 and balances less than $50,000 are $4,792,683.Required:1. List the relationships, ratios and trends that will provide useful information about the overall reasonableness of accounts payable. Consider income statement accounts that affect accounts payable in selecting the analytical procedures. (6 marks)2. Prepare a substantive audit programme for accounts payable in a performance format. Group the procedures under the headings General, Ending Balances, Cut off and Disclosure & Classification. (10 marks)Note: Use Figure 12.14 (page 427) as an example of the format of a balances audit programme. 3. Assume that a) assessed control risk had been high rather than low for each transaction-related audit objective; b) inherent risk was high for each balance-related audit objective; and c) analytical procedures indicated a high potential for misstatement. What would be the effect on the audit procedures and sample sizes in the audit programme in 2? (5 marks)4. Confirmation requests were sent to a stratified sample of 51 vendors listed in Figure 14.10 (page 530). Confirmation responses from 45 suppliers were returned, indicating no difference between the supplier's and Pinnacle's records. Figure 14.11 (pages 531-532) presents the six replies that indicate a difference between the supplier's balance and the company's record. The auditor's follow-up findings are indicated for each reply. Prepare an Analysis of Accounts Payable Confirmation Exceptions as shown in Figure 14.12* (page 533) to determine the misstatements, if any, for each difference. Include the balances confirmed without exception as one amount on the schedule for each stratum, and total the schedule columns. Brief explanations should show accounts to be debited and credited where appropriate. (13 marks)Note: Assume that Pinnacle Manufacturing took a complete physical inventory as at 31 December 20X2 and the auditor concluded that recorded inventory reflects all inventory on hand at the balance sheet date.* Figure 14.12 shows the $27,500 difference in Fiberchem as a Timing difference (no misstatement) in accounts payable; this is incorrect. It is an understatement in accounts payable.5. Estimate the total misstatement in the income statement, based on the income statement misstatement identified in 4 above. The misstatement should be calculated separately for each stratum of accounts payable. The total misstatement should include the projected misstatement and an estimate for sampling error; consider the size of the population and the amounts tested and use professional judgement to estimate the sampling error. (5 marks)6. Estimate the total misstatement in accounts payable using the same methodology as in 5 above. Note that a misstatement caused by the failure to record an FOB origin purchase is an understatement of accounts payable and inventory and has no effect on income.(6 marks)7. What is your conclusion about the fairness of the recorded balance in accounts payable for Pinnacle Manufacturing as it affects the income statement and balance sheet, and your assessment of control risk as low for all transaction-related audit objectives? Assume that tolerable error for accounts payable as it affects the income statement is $230,000. (5 marks)
The United States' claim to the Oregon Country rested on all of the following except the
What is the most appropriate data model? What are the advantages of using GIS? What are the disadvantages of using GIS?
This job examines how depression is often referred to as being endogenous (biological) or reactive (psychological) in origin.
What are industrial smog, photochemical smog, and atmospheric brown clouds, and how do they relate to the concept of inversion? What are primary and secondary pollutants?
Stanford Medical Center is a well-known and well-respected academic medical center. It has been approached by the government of Vietnam to develop an affiliation with its main national hospital in Saigon.
Write an essay in which you use an example from the history of science that demonstrates the changing nature of scientific theories.
How would you characterize your parents' (or someone else's parents that you know well enough, if you prefer) parenting style? How did the parenting style you experienced affect your feelings and behavior?
In addition to adapting value and supply chain concepts to streamline business processes, planning, and operation, CIOs must communicate effectively; build internal alliances and partnerships with suppliers, customers, and manufacturers;
You are marketing director for a cruise line operating truly luxurious ships. These have superb service and cuisine. How would you proceed to identify the most promising distributors?
Your obligation to this case is to write a report to the judge on the inmate's progress in prison. The inmate is eligible for early release because of good behavior.
Includes Historical and current factors that influence health and disease in the United States and Mexico identifies the critical economic, socio-political, and cultural events
Define productive behavior and counterproductive behavior, explain the impact that productive and counterproductive behaviors have on job performance and the overall performance of an organization
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd