We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

AUDITING - Essay Example

Comments (0)
Summary
AUDITING Name: Course: Professor: University: City and State: Date: Introduction The process of auditing requires an evaluation of the specified items to ensure that the report is aligned with the reality. This essay will attempt to do an audit of rent stock, liabilities and the receivables of Wentworth Brewster limited…
Download full paper
GRAB THE BEST PAPER

Extract of sample
AUDITING

Download file to see previous pages... The paper will also indicate any recommendation on furthering the audit in case of an audit problem. Finally the paper will outline the actions following the further work done on the audit. Analysis of the Four Items Debtors During interim audit preparation, a list of who owes the company and the total amount they owe is drafted. According to the trial balance dated 31st March 2011, the amount expected from the debtors amounts to 950,000 pounds. During auditing, the expectation is that the schedule of debtors or the accounts receivables should always agree with the figures in the financial statements (Loughran 2010). Audit problems normally arise as a result of not taking into considerations the risks involved when dealing with accounts receivables. The accounts receivables that have been listed may be inaccurate. It is also possible that the receivables may not be existing or may not be collectible. The audit should consider the write offs of the bad debts. The sales transaction should always be processed at the right period to avoid recording of sales due the next period. In this case for instance, Multi gym which is a private company, may be defaulting from paying 95,000 pounds, the reason being the machines they purchased from Wentworth Brewster limited could be used for reasons related to jamming (Montgomery 2009). This therefore, has to be indicated in the bad debts and deducted from the accounts receivables. There debtors have balances at the end of the year that range from 5000 to 20000 pounds. The specific amount of the balances is not specified. This could lead to assumptions that may trigger false figures in the income statements. The schedule for the accounts receivables hold be reviewed so to match with those in the financial statement. Claim for Damages During audit preparation, a schedule should be done relating to the creditors of the firm or those individuals or business that have a claim. The totals in the formulated list should always be equal with the figures in the financial statement. According to the trial balance dated 31st March 2011, the total amount of money claimed for damages is 25000 pounds. This amount should be included in the schedule as amount payable to the individual claiming. However, the draft has not included provision for claims from other customers (Loughran 2010). For instance, the three customers have placed claims against retailers for suffering injuries as a result of vague instructions. For there to be a correct indication of the reality on the grounds, the draft should make a provision for such claims then they will be directed to the company. Stock The trial balance indicated stock amounting to 1.6 million pounds. According to the laid down accounting principles, it is required stock for the previous period to be reported in that period. This therefore presents an audit problem. In order to determine stock for the period, the amount of stock currently being held is subtracted from sales of that period. This resulting figure indicates the stock that has been sold. This is therefore added to the beginning inventory to determine the total stock available for dale. This is where the audit discovers that 0.5 million stock was included in the previously concluded period. Rent Rent when considered as an income should be recorded in the period, it is received and not reported. According to ...Download file to see next pagesRead More
Comments (0)
Click to create a comment
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Auditing
Various driving factors and inherent benefits for different companies are proving to be incentives for the organisations towards enhanced financial globalisation. The growing interdependence of developed economies on developing and emerging economies is contributing towards increased globalisation (Hamilton & Quinlan, 2008, p.iv).
7 Pages(1750 words)Essay
Auditing
In this process, it may happen that the transactions might have occurred after balance sheet date but before the issuance of the financial statement. This affects the financial statements and therefore adjustments are made and properly mentioned in the statements.
4 Pages(1000 words)Essay
Auditing
In the above problem, Bob has breached the confidentiality principle; this is an ethical principle and legal obligation of discretion which require non disclosure of information except to the client and audit committee about the findings or any material uncovered during the course of audit.
3 Pages(750 words)Essay
Auditing
It also includes profitability and protection of the company's assets. This exhibits that the internal control system should first of all meet the objective of accomplishing the company's operational goals and objectives. The second objective of an internal control system is to prepare a reliable and trustworthy financial reporting system.
3 Pages(750 words)Essay
Auditing
al public and the accounting profession have had their differences over time on how the auditor should handle the process and what type of information should be reported by auditors to the users of the financial information. The difference between what the public and other
10 Pages(2500 words)Essay
Auditing
In other words, the procedures may be applied to compare financial information recorded and secured in past, to compare the actual results with initially developed forecasts and targets etc (Internet: allbusiness.com). Indeed, these
3 Pages(750 words)Essay
Auditing
Auditing is the only alternative for a firm to interpret the outcomes of its previous year’s operations and to assess the current status of affairs. The given case reflects the auditing operations in
8 Pages(2000 words)Essay
Auditing
The managers present a financial report to the shareholders indicating the performance of the organization within a financial year or within a given period as the shareholders may require. Since the financial statement may
5 Pages(1250 words)Essay
Auditing
ppointment on the decision to dismiss the current audit firm and believes that since the audit firm was rendering its service for more than 15 years, everyone in the charity was very comfortable with the firm’s auditor. Besides, board members also revealed their concern about
3 Pages(750 words)Essay
Auditing
Auditors then study the internal control system of the organization when they finish identifying risks: this system is made of procedures that help to prevent errors, protect assets, and guarantee compliance with
8 Pages(2000 words)Essay
Let us find you another Essay on topic AUDITING for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us