Auditors are often concerned with the possibility of overstatement of sales and receivables. However, management may also have reasons for understating these balances. Which of the following would explain understatement of sales and receivables?

Subsequent Events Milne Manufacturing’s fiscal year end was 12/31/X5. The auditors finished all test work on 3/15/X6, and the audit report and financial statements were publicly distributed on 3/28/X6. Consider each of the following material events and determine what action, if any, the auditor should take. Select the best action for each of the situations below. Each answer will be used only once.

All of the following are considered when developing a pharmacy’s formulary, except 

The CPA firm of Mantle and Maris issued an audit report for the financial statements of the Berra Company. Thereafter, each of the following four events took place. Which of these events is most likely to cause Mantle and Maris to make additional inquiries?

Which of the following events occurring after the issuance of an auditor’s report most likely would cause the auditor to make further inquiries about the previously issued financial statements?

Which of the following statements is not correct about materiality?

Extra Credit What is one qualitative factor that could make a quantitatively immaterial transaction material? (3 points possible).

(Please use the bank reconciliation information above as a reference for this question.) After reconciling, what amount should Wilson have recorded as cash on the book as of October 31st?

Audit Evidence For each audit procedure below:a)    Determine which type of evidence the auditor gatheredb)    Determine what management assertion is tested by the evidence described  Audit Procedure Evidence Assertion Question operating personnel about the possibility of obsolete or slow-moving inventory. Send letters directly to suppliers for information about inventory held by the client that is on consignment. Select a sample of quantities of inventory in the factory warehouse and trace each item to the inventory count sheet to determine if it has been included. Tour the company’s production facility and find a selection of items from the fixed asset register in the facility. Develop an expectation for plant electricity expense based on number of machines and average machine hours per work day. Compare your expectation to the recorded electricity expense to ensure they client has recorded enough expense. Trace a transaction from the sales journal to the general ledger. Watch a billing specialist match a purchase order, sales order, shipping records before creating an invoice.

(Please use the bank reconciliation information above as a reference for this question.) What amount should be listed on the October reconciliation as “Ending balance per the bank?” (Hint: Don’t make this one more complicated than it is.)