Week 3 Assignment – Assertions and Audit Evidence

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Week 3 assignment – Assertions and Audit evidence

ACC 490
September 17, 2012

5-30| (Assertions) In planning the audit of a client's financial statements, an auditor identified the following issues that need audit attention.| 1. The allowance for doubtful accounts is fairly presented in amount. * Valuation or allocation assertion

2. All accounts payable owed as of the balance sheet date are included in the financial statements. * Existence or occurrence assertion
3. All purchase returns recorded in the general ledger are valid. * Existence or occurrence assertion
4. The allowance for doubtful accounts is fairly presented in amount. * Valuation or allocation assertion
5. All accounts payable owed as of the balance sheet date are included in the financial statements. * Completeness assertion
6. All purchase returns recorded in the general ledger are valid. * Existence or occurrence assertion
7. A retail client values its inventory using the retail method of accounting. * Valuation or allocation assertion
8. A construction client uses the percentage of completion method for recognizing revenues. * Existence or occurrence assertion
9. A client has a defined benefit pension plan and does not have competent employees to write footnote disclosures. * Presentation and disclosure assertion – classifications and understandability 10. Slow-moving items included in inventory have been properly identified and priced. * Valuation or allocation assertion

11. A client financed the acquisition of assets using preferred stock that pays a 3 percent dividend and must be redeemed from the shareholders next year. * Rights and obligations assertion

6-22| (Audit evidence) During the course of an audit, the auditor examines a wide variety of documentation. Listed below are some forms of documentary evidence and the sources from which they are obtained.|...
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