Elizabeth Cole, the senior auditor-in-charge of the audit of Thorne Company, a small manufacturer, was busy writing
Question:
Elizabeth Cole, the senior auditor-in-charge of the audit of Thorne Company, a small manufacturer, was busy writing the audit report for another engagement. Accordingly, she sent Martin Joseph, a recently hired staff assistant of the CPA firm, to begin the audit of Thorne Company, with the suggestion that Joseph start with the accounts receivable. Using the preceding year's audit working papers for Thorne Company as a guide, Joseph prepared a trial balance of Thorne's trade accounts receivable, aged them, prepared and mailed positive confirmation requests, examined underlying documents plus other support for charges and credits to the Accounts Receivable ledger account, and performed such other work as he deemed necessary to assure the validity and collectibility of the accounts receivable. At the conclusion of Joseph's work, Cole traveled to Thorne Company to review Joseph's working papers. Cole found that Joseph had carefully followed the prior year's audit working papers.
Required:
State how the three generally accepted auditing standards of fieldwork were fulfilled, or were not fulfilled, in the audit of the accounts receivable of Thorne Company.
Step by Step Answer:
Principles Of Auditing And Other Assurance Services
ISBN: 9780072327267
13th Edition
Authors: Ray Whittington, Kurt Pany