1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
leva [86]
3 years ago
13

King, CPA, is auditing the financial statements of Cycle company, a client that has receivables from customers arising from the

sale of goods in the normal course of business. King is aware that the confirmation of accounts receivable is a generally accepted auditing procedure.
Required:
a. Under what circumstances could King justify omitting the confirmation of Cycle’s accounts receivable? In designing confirmation request, what factors are likely to affect King’s assessment of the reliability of confirmations that King sends?
b. What alternative procedures could King consider performing when replies to positive confirmation requests are not received?
Business
1 answer:
Jobisdone [24]3 years ago
6 0

Answer:

King, CPA

Auditing the financial statements of Cycle Company

a-1 Circumstances under which the omission of the confirmation of accounts receivable may be justified by King:

1. Accounts receivable are immaterial because of their values.

2. Low risk concerning accounts receivable.

3. Reliance can be placed on analytics and substantive tests to detect misstatements.

4. Using confirmations may be ineffective.

a-2) Factors that are likely to affect King's assessment of the reliability of confirmations:

1. The assessed skills of the recipients to confirm their balances.

2. The existence of verifiable customer records.

3. Proper documentations of transactions.

b. The alternative procedures that King could consider performing when replies to positive confirmation requests are not received are:

1. The auditor can conduct substantive tests, with tests of detailed transactions and analytical procedures.

2. Examination of cash receipts, sales orders, invoices, shipping documents, and correspondence files.

Explanation:

Where accounts receivable balances are material, the auditor is required to send out requests to customers to confirm their balances.  The confirmation may be in the form of a negative, positive, or blank confirmation, depending on the prevailing circumstances and the assessed risks.

You might be interested in
When the price of a bond is above the equilibrium price, there is excess ___ in the bond market and the price will ___.
Setler [38]
C. When price is too high, people are less willing to purchase the good, so demand is lower when price is higher. (Demand curve is always slopping downwards as a result). As the price is high, producers are more willing to sell their goods (I.e. bonds) which will give them more money per unit good being sold. This will result in Quantity Supplied (Qs) being greater than Quantity Demanded (Qd), and so, there is a surplus of bonds in the market. This will cause a downward pressure to apply on price, so that Qd = Qs eventually.

Hope this helps!
8 0
3 years ago
Suppose the price of hot wings is $10, the price of beer is $1, and the consumer’s income is $50. In addition, suppose the consu
IgorC [24]

Answer:

a. budget constraint intersects the vertical axis at 25 beers.

Explanation:

A budget constraint shows all the combinations that a consumer might purchase of two given products or services. The total consumption can be represented by a consumption possibilities frontier curve:

  • originally you could purchase 50 beers or 5 hot wings
  • then as the price of beer increases to $2, you can only buy 25 beers or 5 hot wings

7 0
3 years ago
A bond with a face value of $100,000 was issued for $93,500 on January 1 of this year. The stated rate of interest was 8 percent
Inessa05 [86]

Answer:

So interest payment will be $8000

Explanation:

We have given face value of the bond = $100000

And bond is issued for $93500

Standard rate of interest = 8 %

And market rate of interest = 10 %

We have to find the interest paid

Interest payment will be given by

Interest payment = face value of bond × standard rate of interest

= $100000×0.08 = $8000

So interest payment will be $8000

5 0
3 years ago
If your business is not efficient, where will your numbers fall on the Production Possibility Frontier?
Sergeeva-Olga [200]

Answer:

Inside the Production Possibility Frontier.

Explanation:

PPF is a curve that shows the various combination of 2 goods that an economy produces when resources are fixed. Thus, any point or bundle inside the production possibility frontier shows inefficiency in the production while the point on the production possibility frontier shows the efficient production from the available resources. But, the point outside the PPF exhibits a non-achievable point.

8 0
3 years ago
Mary ran into a store dedicated to the newest cat foods offered by her favorite pet food provider. she has so much fun interacti
maks197457 [2]

mary most likely found a pop-up store

8 0
3 years ago
Other questions:
  • In her work at Powered Solutions, Angelica helps business clients identify, organize, and analyze data from social media sources
    14·1 answer
  • When a life insurance company advertises the safety and security of its products, it is using a ________ advertising strategy.
    8·2 answers
  • The federal government wants more people to buy hybrid or electric cars. Currently, they are more expensive than cars fueled by
    5·1 answer
  • All of the following are examples of results of unethical business actions except:
    15·2 answers
  • ABC Co. purchased equipment for $72,000 on January 1, 2017. The equipment is expected to have a five-year life and a residual va
    6·1 answer
  • An economics system in which consumers vote with their dollars to answer what is produced and how it is produced is known as ___
    13·2 answers
  • If a ppf has a negative slope and is bowed​ out, we experience​ ________ opportunity costs as we continue to move down and to th
    9·1 answer
  • Hutchins Company had​ 200,000 shares of common​ stock, 50,000 shares of convertible preferred​ stock, and​ $2,000,000 of​ 10% co
    13·1 answer
  • Classify each of the following in terms of their effect on interest rates (increase or decrease): I. Covenants on borrowing beco
    11·1 answer
  • Write the sum as a product of two factors 25g + 10f + 5​
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!