question 1

question 2

question 3

question 4

question 5

You are evaluating audit results for assets in the audit of Vegetable Oil Manufacturing Co. You set the preliminary judgment about materiality at 550,000. The account balances, performance materiality, and known misstatements and direct projection in the accounts are shown next. Accounts Account Balance $ Tolerable Known Misstatements Misstatements Direct Projections Cash S 50,000 5,000 1.000 Accounts 1,200,000 30,000 20,000 receivable Inventory 2,500,000 50,000 Other assets 250,000 15,000 12,000 Total 4,000,000 100,000 Required: a. Assume you tested a sample of inventory account in amounts totaling $1,000,000, and found it misstated in an amount of $30,000. What is your estimate of the total misstatement in inventory? (4 Points) b. Based on the audit of the above accounts and ignoring other accounts, What opinion would you give on the overall financial statements, and why? (4 pts) 1. A departure from a promulgated GAAP 2. The auditor disagree with a disclosure 3. Report involving other auditors 4. Scope of the audit has been restricted by management Highly Material Immaterial Conditions (a) Material suitable audit opinion for each of the following conditions: Materiality Level (b) Highly material Type Of audit Opinion (c) Complete the below table with the words High, Low, Medium, Varies, based on what you learned regarding the appropriateness of evidences: Appropriateness of Evidences Types of Evidences Independence of Provider Auditor's Direct Objectivity of Knowledge Evidence Physical Examination Confirmation Documentation Observation Serview CPA Place the following terms on the above lune 1 Audit services 2 Assurance service Accounting and bookkeeping services Attestation services Suppose that you are doing an audit and obtain the following information about your client and it's industry: Client Industry 2009 2008 2009 2008 Inventory turnover 3.0 3.5 3.9 3.4 Gross margin percent 24.1% 26.4% 27.3% 26.2% Required: Explain how would you benefit from the above information to determine the NET of your audit