AUDITING Essay example
Masters
Essay
Finance & Accounting
Pages 8 (2008 words)
Download 0
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…

Introduction

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. ...
Download paper
Not exactly what you need?

Related papers

Auditing process
This type of risk is known as engagement risk. The probabilities of different loss or damages that can be caused due to this type of risk can be a financial loss, loss of reputation, and ultimately leading to the downfall of the audit farm. Engagement risks can further be subdivided into three types of risks, namely 1) Client’s business risks, 2) Auditor’s business risk and 3) Audit risk. In…
Auditing
A report by an auditor is a complete review by a third party of the financial position and bookkeeping practices of a company as well as financial statements’ preparation. These financial statements include the statement of cash flows, the income statement and the statement of financial position of a company. In dissimilar contexts, other forms of reports may consist of a concise address to…
auditing
Overstating of revenues and the understating of expenses Revenues can be overstated so as to show that the company is doing well and that would attract new shareholders. The shareholders would be attracted by the increased revenues and that would imply that they would also get more dividends from the company because of the god performance of the company. The understating of expenses will mean that…
Auditing
This report will discuss several audit problems which can impact the materiality of financial statements. Wentworth Brewster limited specializes with the manufacture of sports equipment. All the products are sold to specialist retailers and private member gym clubs. The company owns a large number of freehold premises than it generally requires. The surplus office is usually sub-let to three other…
auditing
A high net profit margin indicates that a company converts its sales into profits fast. The net profit margin also considers costs associated with the sale of products. There are several factors which triggered a decrease in the net profit margins. They include: a. Inventories Even though, a company treats inventories as an asset in the balance sheet, the cost of sales are not reported until a…
auditing
As the financial statements are the representation of management, it becomes very important to maintain the reliability and authenticity of these statements in order to avoid fraudulent activities in their preparation. The auditors have the responsibility of expressing their views related to the maintenance of fairness by the management. They are authorized with the responsibility of assessing the…
auditing
The auditor is responsible for collecting and evaluating the evidence in order to make an opinion on the financial position of a company. In the contemporary business world, various changes have been experienced as auditors embark on addressing the challenges that face them as professionals. Quality auditing by independent auditors is a vital aspect in that it ensures that capital markets are…