Question
CASE STUDY You are auditing the financial statements of Skusta Store, a retailer of sporting goods, appliances, and electronics. During the prior years' audits of
CASE STUDY
You are auditing the financial statements of Skusta Store, a retailer of sporting goods, appliances, and electronics. During the prior years' audits of Skusta Store, you noticed that management was less concerned about the timely recording of liabilities and expenses than assets and revenues. As a result, very little of Skusta Store's internal control resources were expended in assuring an accurate and timely recording of accounts payable. You also believed that Skusta Store's management may be motivated to delay recording its liabilities at year end, so you are currently approaching the search for unrecorded liabilities with caution.
Questions:
a. What are the substantive auditing procedures would you perform in searching for Skusta unrecorded liabilities?
b. How would the nature, timing and extent of your substantive auditing procedures most likely be affected by Skusta Store's deficient control environment?
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