Auditing Cases, An Interactive Learning Approach, Seventh Edition.

Oilfields-R-Us, Inc. Evaluation of Management Review Controls

[3] In your role as financial statement auditor, provide an overall assessment as to whether the MRC over the allowance for doubtful accounts described in Part B can "effectively prevent or detect errors or fraud that could result in material misstatements in the financial statements" (AS 2201.42). If you assess the control as being designed effectively, please state one or two reasons why. If you assess the control as having significant design deficiencies, please state one or two reasons why, and what changes the Company can make to improve. Yes, it is designed effectively No, it is not designed effectively [4] List three tests you would perform as Oilfields' auditor to test the control's operating effectiveness, including the supporting evidence you would request from management. Test 1: Test 2: Test 3: [3] In your role as financial statement auditor, provide an overall assessment as to whether the MRC over the allowance for doubtful accounts described in Part B can "effectively prevent or detect errors or fraud that could result in material misstatements in the financial statements" (AS 2201.42). If you assess the control as being designed effectively, please state one or two reasons why. If you assess the control as having significant design deficiencies, please state one or two reasons why, and what changes the Company can make to improve. Yes, it is designed effectively No, it is not designed effectively [4] List three tests you would perform as Oilfields' auditor to test the control's operating effectiveness, including the supporting evidence you would request from management. Test 1: Test 2: Test 3