revenue-related accounts. What potential misstatements are indicated by each of these analytical procedures? 1) Comparison of sales returns as a percentage of revenue to previous years’ or industry data. The potential misstatement is that it will be under-or overstatement of sales returns. 2) Estimation of sales commission expense by multiplying net revenue by average commission rate and comparison of recorded sales commission expense. The potential misstatement is that the under-or overstatement of
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Beginning the Audit ACC 546 June 11‚ 2012 Anderson‚ Olds and Watershed Phoenix‚ Arizona 85003 Mr. Larry Lancaster Apollo Shoes Phoenix‚ Arizona 85003 Dear Mr. Lancaster‚ The purpose of this letter is to make sure we have an understanding as to what the audit of Apollo Shoes financial statements will consist of for the year ending December 31‚ 2011. The objective of this audit of the company’s financial statements is to confirm that all aspects of the company are in compliance
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Week 5 HW Solutions 13-22 a. (2) b. (2) c. (1) d. (4) 13-23 a. (2) b. (3) c. (1) d. (3) * Discussion Questions and Problems 13-24 a. | b. | 1. TD of B 2. TD of B 3. AP 4. T of C 5. ST of T 6. AP 7. TD of B 8. T of C 9. TD of B 10. T of C 11. T of C | RecalculationDocumentationAnalytical proceduresDocumentationDocumentationAnalytical proceduresDocumentationInquiry and observation ConfirmationDocumentationInquiry
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NEGLIGENT MISSTATEMENT Main issue: Is the P likely to succeed in an action under the tort of negligence misstatement against the D? Sub-issue 1.1: Duty of Care (NO 3RD PARTY) Law/App: The tort of negligent misstatement was effectively established since the case of (Hedley Byrne v Heller). Law stipulates that there must be a special relationship (an extension of “neighbour principle” established in Donoghue v Stevenson) for between P and D for a DOC to rise in the tort of negligent misstatement: (L
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Kong Ocean Park Corporation Ordinance 1987. This responsibility includes designing‚ implementing and maintaining internal control relevant to the preparation and the true and fair presentation of financial statements that are free from material misstatement‚ whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s responsibility Our responsibility is to express an opinion on these financial
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In early 2009 the chairman of Satyam Computer Services admitted publicly to a fraud taking place in the company. Satyam reported in the financial statements billions of dollars in profits and cash assets that never existed. The public auditor’s responsible for auditing the financial statements of Satyam Computer Services at the time was PW India‚ an affiliate of Pricewaterhouse Coopers. The Securities and Exchange Commission determined that Satyam was able to commit the financial statement fraud
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14-3. It may be appropriate to allocate a proportionately larger share of tolerable misstatement to accounts receivable because of high risk of misstatements in this account and the high costs of applying certain procedures used in auditing receivables (such as sending and processing confirmation requests). This simply means that the auditor chooses to allow relatively more of the total tolerable misstatement (financial statement materiality) remain undetected in accounts receivable where they
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The Existence of Audit Expectation Gap: Bangladesh Perspective - Perceptions of Naïve Investors‚ Students and Professionals Regarding the Audit and Role of Knowledge Affecting the Gap. Abstract: The study investigates the existence of audit expectation gap in relation to society’s unreasonable expectations out of auditing in Bangladesh. This also identified the effects of auditing knowledge on the gap. Among all the classes of our society the accounting graduates are expected to have more
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Topic/Subtopic Cases/Law Facts /Quotation/Principle/Definition Negligence. Definition Blyth v Birmingham Waterworks Co (1856) 11 Ex. 781‚ per Alderson B ‘Negligence is the omission to do something which the reasonable man‚ guided upon those considerations which ordinarily regulate the conduct of human affairs‚ would do‚ or do something which a prudent and reasonable man would not do.’ The tort of negligence Negligence is about fault based liability. The plaintiff must prove on the balance
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commence its business as soon as it is incorporated. But a public company shall not commence its business immediately unless it has been granted the certificate of commencement of business. 4. Invitation to public A public company by issuing a prospectus may invite public to subscribe to its shares whereas a private company cannot extend such invitation to the public. 5. Transferability of shares There is no restriction on the transfer of share In the case of public company whereas a private company
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