16-38 (Types of Engagements and Reports) The fourth standard of reporting states: "The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed in the auditor's report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor’s report. In all cases where an auditor's name is associated with financial statements, the auditor should clearly indicate the character of the auditor’s work, if any, and degree of responsibility the auditor is taking in the auditor’s report."
Required:
In each of the following independent situations, indicate how the CPA responds to this standard.
(a) The CPA is engaged to prepare the financial statements for a non-public entity without performing an audit or review.
(b) The CPA is engaged to compile and review the financial statements of a nonpublic company.
(c) The CPA is engaged to prepare the federal and state income tax returns. No other services are provided.
(d) The CPA is engaged to audit the annual financial statements of a public company.
(e) The CPA's name is contained in the client's registration statement that includes audited financial statements for the year ended December 31, 2010, and unaudited financial statements for the three months ended March 31, 2011. The SEC requires the CPA to include in the registration statement consent to the use of the public accounting firm's name in the statement.
Click here for the solution: The fourth standard of reporting states: "The auditor must either express an opinion regarding the financial statements
Showing posts with label fourth. Show all posts
Showing posts with label fourth. Show all posts
Wednesday, September 2, 2015
Saturday, August 1, 2015
The fourth standard of reporting states: “The auditor must either express an opinion regarding the financial statements
16-38: The fourth standard of reporting states: “The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed in the auditor’s report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor’s report. In all cases in which an auditor’s name is associated with financial statements, the auditor should clearly indicate the character of the auditor’s work, if any, and the degree of responsibility the auditor is taking in the auditor’s report.”
Required
In each of the following independent situations, indicate how the CPA responds to this standard.
a. The CPA is engaged to prepare the financial statements for a nonpublic entity without performing an audit or review.
b. The CPA is engaged to compile and review the financial statements of a nonpublic company.
c. The CPA is engaged to prepare the federal and state income tax returns. No other services are provided.
d. The CPA is engaged to audit the annual financial statements of a public company.
e. The CPA’s name is contained in the client’s registration statement that includes audited financial statements for the year ended December 31, 2010, and unaudited financial statements for the three months ended March 31, 2011. The SEC requires the CPA to include in the registration statement consent to the use of the public accounting firm’s name in that statement.
Click here for the solution: The fourth standard of reporting states: “The auditor must either express an opinion regarding the financial statements
Required
In each of the following independent situations, indicate how the CPA responds to this standard.
a. The CPA is engaged to prepare the financial statements for a nonpublic entity without performing an audit or review.
b. The CPA is engaged to compile and review the financial statements of a nonpublic company.
c. The CPA is engaged to prepare the federal and state income tax returns. No other services are provided.
d. The CPA is engaged to audit the annual financial statements of a public company.
e. The CPA’s name is contained in the client’s registration statement that includes audited financial statements for the year ended December 31, 2010, and unaudited financial statements for the three months ended March 31, 2011. The SEC requires the CPA to include in the registration statement consent to the use of the public accounting firm’s name in that statement.
Click here for the solution: The fourth standard of reporting states: “The auditor must either express an opinion regarding the financial statements
Friday, July 31, 2015
Tel-Com Company, a telephone service and supply company, has just completed its fourth year of operations
Problem 9-3A Compare Two Methods of Accounting for Uncollectible Receivables
Tel-Com Company, a telephone service and supply company, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the company is considering changing to the allowance method. Information is requested as to the effect that an annual provision of ¾% of sales would have had on the amount of bad debt expense reported for each of the past four years. It is also considered desirable to know what the balance of Allowance for Doubtful Accounts would have been at the end of each year. The following data have been obtained from the accounts:
Year Sales Written Off 1st 2nd 3rd 4th
1st $700,000 $2,000 $2,000
2nd $900,000 $3,400 $1,800 $1,600
3rd $1,200,000 $6,450 $1,000 $3,700 $1,750
4th $2,000,000 $9,200 - $1,260 $3,700 $4,240
Instructions
1. Assemble the desired data, using the following column headings:
2. Experience during the first four years of operations indicated that the receivables were either collected within two years or had to be written off as uncollectible. Does the estimate of 3/4% of sales appear to be reasonably close to the actual experience with uncollectible accounts originating during the first two years? Explain.
Check: 1. Year 4: Balance of Allowance Account, End of Year, $14,950
Click here for the solution: Tel-Com Company, a telephone service and supply company, has just completed its fourth year of operations
Tel-Com Company, a telephone service and supply company, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the company is considering changing to the allowance method. Information is requested as to the effect that an annual provision of ¾% of sales would have had on the amount of bad debt expense reported for each of the past four years. It is also considered desirable to know what the balance of Allowance for Doubtful Accounts would have been at the end of each year. The following data have been obtained from the accounts:
Year Sales Written Off 1st 2nd 3rd 4th
1st $700,000 $2,000 $2,000
2nd $900,000 $3,400 $1,800 $1,600
3rd $1,200,000 $6,450 $1,000 $3,700 $1,750
4th $2,000,000 $9,200 - $1,260 $3,700 $4,240
Instructions
1. Assemble the desired data, using the following column headings:
2. Experience during the first four years of operations indicated that the receivables were either collected within two years or had to be written off as uncollectible. Does the estimate of 3/4% of sales appear to be reasonably close to the actual experience with uncollectible accounts originating during the first two years? Explain.
Check: 1. Year 4: Balance of Allowance Account, End of Year, $14,950
Click here for the solution: Tel-Com Company, a telephone service and supply company, has just completed its fourth year of operations
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