Down Market Department Stores PLC sell a high proportion of their merchandise on hire purchase (HP). The

Question:

Down Market Department Stores PLC sell a high proportion of their merchandise on hire purchase (HP).

The system for dealing with HP sales is highly organized and well controlled. The HP receivables ledger is kept on a specially designed computer system. The HP receivables of the company at 30 September 2X10 appear in the accounts at £4.6 million out of gross assets of £19.3 million.

Questions:-

1. What assertions are the directors implying in stating the HP receivables at £4.6 million?
2. What possible misstatements could occur?
3. What varieties of evidence may be collected re this current asset?
4. What basic techniques for collecting evidence can be applied to the item?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Auditing

ISBN: 9780134613116

10th Edition

Authors: Alan Millichamp, John Taylor

Question Posted: