State the two primary types of subsequent events that require consideration by management and evaluation by the auditor, and give two examples of each type.

-

State the two primary types of subsequent events that require consideration by management and evaluation by the auditor, and give two examples of each type.

Answer:

• Events that have a direct effect on the financial statements and required adjustment. Examples include declaration of bankruptcy by a customer with an outstanding accounts receivable balance due to deteriorating financial condition; settlement of litigation at an amount different from the amount recorded on the books.
• Events that have no direct effect on the financial statements but for which disclosure is advisable. Examples include a decline in the market value of securities held for temporary investment or resale during the subsequent period; issuance of bonds or equity securities during the subsequent period.

Comments

Post a Comment

Popular posts from this blog

What is JAD and how are users involved? What are advantages and disadvantages of JAD?

-
What is JAD and how are users involved? What are advantages and disadvantages of JAD? Joint application development, is a popular fact finding technique that brings users into the development process as active participants. Users have a vital stake in the information system, and should participate fully in the development process. They are/should be involved at every stage of development. Advantages : Users can participate effectively in the requirements modeling stage. More accurate statement of systems requirements, better understanding of common goals and stronger commitment to success of the new project Disadvantages : More expensive, can be cumbersome if the group is too large for the project.
Read more

What are the three dimensions to business problems? Give an example of each.

-
What are the three dimensions to business problems? Give an example of each. Answer: The three dimensions to business problems are: (1) Organizational: This may include outdated business processes, unsupportive culture and attitudes, political conflict, turbulent business environment and change, complexity of task, inadequate resources. (2) Technology: This may include insufficient or aging hardware, outdated software, inadequate data management, insufficient telecommunications capacity, incompatibility of old systems with new technology, and rapid technological change. (3) People: This may include lack of employee training, difficulties in evaluation performance, legal and regulatory compliance, work environment, lack of employee support and participation, indecisive management, or poor management.
Read more

A laboratory assistant prepared solution of 0.8 M, 0.6 M, 0.4 M, and 0.2 M sucrose, but forgot to label them. After realizing the error, the assistant randomly labeled the flasks containing these four unknown solutions as flask A, flask B, flask C, and flask D.

-
A laboratory assistant prepared solution of 0.8 M, 0.6 M, 0.4 M, and 0.2 M sucrose, but forgot to label them. After realizing the error, the assistant randomly labeled the flasks containing these four unknown solutions as flask A, flask B, flask C, and flask D. Design an experiment, based on the principles of diffusion and osmosis, that the assistant could use to determine which of the flasks contains each of the four unknown solutions. Include in your answer (a) a description of how you would set up and perform the experiment: (b) the results you would expect from your experiments: and (c) an explanation of those results based on the principles involved. (Be sure to clearly state the principles addressed in your discussion.)
Read more