Inspection. Cathy von Craushaar, Wirtschaftsprufer, is in charge of the audit of the financial statements of Erwartung
Question:
Inspection. Cathy von Craushaar, Wirtschaftsprufer, is in charge of the audit of the financial statements of Erwartung Erhaben, AG, of Stuttgart, Germany, for the year ended 31 December 20X4. The company has had the policy of investing its surplus funds in marketable securities. Its stock and bond certificates are kept in a safe deposit box in a local bank. Only the president and the treasurer of the company have access to the box. Von Craushaar was unable to obtain access to the safe deposit box on 31 December because neither the president nor the treasurer was available. Arrangements were made for von Craushaar’s assistant to accompany the treasurer to the bank on 11 January to examine the securities. Von Craushaar’s assistant has never examined securities that were being kept in a safe deposit box and requires instructions. Von Craushaar’s assistant should be able to inspect all securities on hand in an hour.
Upon returning from the bank, von Craushaar’s assistant reported that the treasurer had entered the box on 4 January.
Required
A. List the instructions that von Craushaar would give to her assistant regarding the examination of the stock and bond certificates kept in the safe deposit box. Include in your instructions the details of the securities to be examined and the reasons for examining these details.
B. The treasurer stated that an old photograph of the company’s original building had been removed. The photograph was loaned to the local historical society for display purposes.
List the additional audit procedures that are required because of the treasurer's action.
Step by Step Answer:
Principles Of Auditing: An International Perspective
ISBN: 9780077095321
1st Edition
Authors: Rick Stephan Hayes, Philip Wallage, Arnold Schilder, Roger Dassen