I am having difficulty making out the needed processes to solve the auditing case for Old Main
Question:
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I am having difficulty making out the needed processes to solve the auditing case for Old Main Accounting. Please review the attached files and show me what the completed work paper should look like, along with the following questions: (a) Summarize your findings. How many misstatements did you find (if any)? (b) Which management assertion(s) are you concerned about for the sales discounts account? Explain whether there are any assertions relating to other financial statement accounts that may be impacted by this/these misstatement(s). (c) Consider AU 350, Audit Sampling, paragraphs 0.26 and 0.27. What other factors should be considered before coming to a final judgment regarding the fairness of the sales discount account? Based upon your testing, are you confident that the sales discount account is fairly stated? Explain. (d) What course of action should you take if you believe the sales discount account is not fairly stated based on the substantive testing you performed? (e) AU 316 (SAS 99) indicates that the auditor should ??ordinarily presume that there is a risk of material misstatement due to fraud relating to revenue recognition.?? Given this emphasis on considering fraud in revenue-related accounts, provide an example of a potential fraud that might be occurring that would result in unrecorded sales discounts. Be specific in hypothesizing what might be occurring. Also provide an example of a fraud that might result in an overstated sales discounts account (i.e., smaller net sales).