Builtrite - Auditing
Solutions for the Biltrite Bicycles Inc. Case
Module I - Assessment of Inherent Risk 2
Module II – Assessment of Control Risk 16
Module III - Control Test: Sales Processing 28
Module IV - PPS Sampling: Factory Equipment Additions 30
Module V - Accounts Receivable Aging Analysis 34
Module VI - Sales and Purchases Cutoff Tests 41
Module VII - Search for Unrecorded Liabilities 46
Module VIII - Dallas Dollar Bank Reconciliation 48
Module IX- Analysis of Interbank Transfers 51
Module X - Analysis of Marketable Securities 53
Module XI - Plant Asset Additions and Disposals 57
Module XII - Estimated Liability for Product Warranty 61
Module XIII - Mortgage Note Payable and Note Payable to Bank Two 63
Module XIV - Working Trial Balance 66
Module XV - Audit Report 82
The following pages in this manual contain the solutions to the Biltrite Bicycles, Inc. audit practice case. The solutions are presented by module number. Answers to the narrative questions are presented first, followed by the completed working papers as solutions to those parts requiring audit working paper completion. The completed working papers are also included in the accompanying instructor's resource CD (IRCD) for those preferring to use the computer for viewing the completed audit working papers. The solutions on the IRCD may be activated as follows:
a. Activate Excel or compatible spreadsheet program.
b. Insert the IRCD containing the Biltrite Solutions in your CD drive.
c. Retrieve the completed working papers using the same titles as contained in the data files students download from the book’s web site.
In addition to the completed working papers, the IRCD and this Biltrite solutions manual include a complete set of audit adjustments and reclassifications that the student will need to complete Module XIV. After the class has completed and submitted Modules I through XIII, the instructor may wish to present the students with a copy of the suggested entries as a set
Module I - Assessment of Inherent Risk 2
Module II – Assessment of Control Risk 16
Module III - Control Test: Sales Processing 28
Module IV - PPS Sampling: Factory Equipment Additions 30
Module V - Accounts Receivable Aging Analysis 34
Module VI - Sales and Purchases Cutoff Tests 41
Module VII - Search for Unrecorded Liabilities 46
Module VIII - Dallas Dollar Bank Reconciliation 48
Module IX- Analysis of Interbank Transfers 51
Module X - Analysis of Marketable Securities 53
Module XI - Plant Asset Additions and Disposals 57
Module XII - Estimated Liability for Product Warranty 61
Module XIII - Mortgage Note Payable and Note Payable to Bank Two 63
Module XIV - Working Trial Balance 66
Module XV - Audit Report 82
The following pages in this manual contain the solutions to the Biltrite Bicycles, Inc. audit practice case. The solutions are presented by module number. Answers to the narrative questions are presented first, followed by the completed working papers as solutions to those parts requiring audit working paper completion. The completed working papers are also included in the accompanying instructor's resource CD (IRCD) for those preferring to use the computer for viewing the completed audit working papers. The solutions on the IRCD may be activated as follows:
a. Activate Excel or compatible spreadsheet program.
b. Insert the IRCD containing the Biltrite Solutions in your CD drive.
c. Retrieve the completed working papers using the same titles as contained in the data files students download from the book’s web site.
In addition to the completed working papers, the IRCD and this Biltrite solutions manual include a complete set of audit adjustments and reclassifications that the student will need to complete Module XIV. After the class has completed and submitted Modules I through XIII, the instructor may wish to present the students with a copy of the suggested entries as a set