{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T08:21:49-04:00", "answer_date": "2024-06-28 08:21:49", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4273058", "url": "\/study-help\/questions\/question-2-eagle-sawmill-limited-eagle-operates-a-timber-sawmill-4273058", "question_creation_date_js": "2024-06-28T08:21:49-04:00", "question_creation_date": "Jun 28, 2024 08:21 AM", "meta_title": "[Solved] Question 2 Eagle Sawmill Limited (Eagle) | SolutionInn", "meta_description": "Answer of - Question 2 Eagle Sawmill Limited (Eagle) operates a timber sawmill in a large regional town. It sources its raw materi | SolutionInn", "meta_keywords": "question,2,eagle,sawmill,limited,operates,timber,large,regional,town,sources,raw", "question_title_h1": "Question 2 Eagle Sawmill Limited (Eagle) operates a timber sawmill in a large regional town. It sources its raw material (pine logs) from a number", "question_title": "Question 2 Eagle Sawmill Limited (Eagle) operates a timber sawmill in a", "question_title_for_js_snippet": "Question 2 Eagle Sawmill Limited (Eagle) operates a timber sawmill in a large regional town It sources its raw material (pine logs) from a number of local growers and from its own plantations Logs are transported on large trucks that are weighed in on the company's weighbridge and weighed out after dropping their loads in the storage area Logs are then debarked and sawn to size in the cutting area of the mill The various logs are then sent to other areas of the sawmill depending on what they will be used for You are a senior on the audit During the planning stage of the audit, you perform analytical procedures In the current audit period, the average number of days to pay creditors has declined significantly from the average recorded over the past three financial years Your investigation reveals that log suppliers represent more than 90 percent of the value of accounts payable As an internal control, details of the goods received notes are matched against the supplier's invoice The accuracy of the invoice is checked, after which the invoice is authorised for payment by the mill accountant Any discrepancy between what the supplier's invoice amounts should be and the actual amount charged by the supplier is communicated to the supplier by way of a pre numbered 'request for credit' form This form provides reasons for the differences and the amount requested to be credited to the company by the supplier The correct amount of the invoice is entered into the accounts payable accounting system and the supplier's monthly statement is reconciled to the accounts payable balance per the creditors' ledger at month end The differences are mostly attributable to Unprocessed invoices due to pricing differences Timing differences in the recorded date of a payment made Amounts requested for credit Settlement discounts disallowed Lee Hayward, the company's financial controller, informs you that due to the increase in the price of timber, new contracts with suppliers have been negotiated over the past year The accounts payable personnel have complained that management is too slow in informing them about the effective dates of the implementation of the contracts and the revised prices A brief inspection of the accounts payable reconciliations for five of the biggest suppliers indicates that many invoices are being held back due to the lack of correct pricing Required 1 a)List two key assertions at risk in relation to accounts payable (5 Marks) 2 b)Provide your justification for each assertion (5 Marks) 3 c)For each assertion, outline two substantive tests of details to obtain sufficient appropriate audit evidence ", "question_description": "

Question 2<\/strong><\/p>

Eagle Sawmill Limited (Eagle) operates a timber sawmill in a large regional town. It sources its raw material (pine logs) from a number of local growers and from its own plantations. Logs are transported on large trucks that are weighed in on the company's weighbridge and weighed out after dropping their loads in the storage area. Logs are then debarked and sawn to size in the cutting area of the mill. The various logs are then sent to other areas of the sawmill depending on what they will be used for.<\/p>

You are a senior on the audit. During the planning stage of the audit, you perform analytical procedures. In the current audit period, the average number of days to pay creditors has declined significantly from the average recorded over the past three financial years.<\/p>

Your investigation reveals that log suppliers represent more than 90 percent of the value of accounts payable. As an internal control, details of the goods received notes are matched against the supplier's invoice. The accuracy of the invoice is checked, after which the invoice is authorised for payment by the mill accountant. Any discrepancy between what the supplier's invoice amounts should be and the actual amount charged by the supplier is communicated to the supplier by way of a pre-numbered 'request for credit' form. This form provides reasons for the differences and the amount requested to be credited to the company by the supplier.<\/p>

The correct amount of the invoice is entered into the accounts payable accounting system and the supplier's monthly statement is reconciled to the accounts payable balance per the creditors' ledger at month end. The differences are mostly attributable to:<\/p>

Unprocessed invoices due to pricing differences<\/p>

Timing differences in the recorded date of a payment made Amounts requested for credit<\/p>

Settlement discounts disallowed.<\/p>

Lee Hayward, the company's financial controller, informs you that due to the increase in the price of timber, new contracts with suppliers have been negotiated over the past year. The accounts payable personnel have complained that management is too slow in informing them about the effective dates of the implementation of the contracts and the revised prices. A brief inspection of the accounts payable reconciliations for five of the biggest suppliers indicates that many invoices are being held back due to the lack of correct pricing.<\/p>

Required<\/em><\/strong><\/p>

1.a)List two key assertions at risk in relation to accounts payable; (5 Marks)<\/p>

2.b)Provide your justification for each assertion. (5 Marks)<\/p>

3.c)For each assertion, outline two substantive tests of details to obtain sufficient appropriate audit evidence.<\/p>", "transcribed_text": "", "related_book": { "title": "Data Analysis And Decision Making", "isbn": "538476125, 978-0538476126", "edition": "4th Edition", "authors": "Christian Albright, Wayne Winston, Christopher Zappe", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/415.jpg", "uri": "\/textbooks\/data-analysis-and-decision-making-4th-edition-415", "see_more_uri": "" }, "free_related_book": { "isbn": "0135000890", "uri": "\/textbooks\/engineering-graphics-with-autocad-2009-1st-edition-978-0135000892-296671", "name": "Engineering Graphics With Autocad 2009", "edition": "1st Edition" }, "question_posted": "2024-06-28 08:21:49", "see_more_questions_link": "\/study-help\/questions\/business-banking-2021-September-12", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/a-in-problem-24-the-school-board-decided-that-because", "description": "a. In Problem 24 the school board decided that because all students in the north and east districts must be bused, then at least 50% of the students who live in the south, west, and central districts...", "stars": 3 }, { "url": "\/study-help\/psychology\/are-summer-stipends-available-1980801", "description": "Are summer stipends available?", "stars": 3 }, { "url": "\/the-shrives-corporation-has-usd10000-it-plans-to-invest", "description": "The Shrives Corporation has $10,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds, which yield 7.5 percent, state of Florida mu ni bonds, which yield 5 percent,...", "stars": 3 }, { "url": "\/study-help\/questions\/following-is-information-on-an-investment-in-a-manufacturing-machine-9880484", "description": "Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. QS 11-19 (Algo) Net present value with...", "stars": 3 }, { "url": "\/study-help\/questions\/2017-1-2900-shares-of-anderson-co-common-stock-which-7574446", "description": "2017): (1) 2,900 shares of Anderson Co. common stock which cost $52,200, (2) 9,600 shares of which cost $547,200, and (3) 6,200 In 2018, Tamarisk completed the following securities transactions. 1....", "stars": 3 }, { "url": "\/study-help\/questions\/question-1-a2-what-is-the-reaction-force-dx-in-1027667", "description": "Question 1 (a2) What is the reaction force Dx in [N]?", "stars": 3 }, { "url": "\/study-help\/questions\/1-what-issues-did-norway-saudi-arabia-and-the-united-1004237", "description": "1. What issues did Norway, Saudi Arabia, and the United Kingdom face as oil-dependent nations, and what strategies and measures were implemented to address them? 2. What issues did Venezuela,...", "stars": 3 }, { "url": "\/study-help\/questions\/iii-optimizing-performance-for-the-lodi-winery-you-have-been-1115461", "description": "III. Optimizing Performance For the Lodi Winery, you have been asked by management to examine the data collected and analyzed in the previous modules. The mobjective is for you to help management...", "stars": 3 }, { "url": "\/study-help\/questions\/the-structure-shown-below-is-supported-by-a-steel-cable-1029089", "description": "The structure shown below is supported by a steel cable from point B to C. This cable has a diameter of 10mm. The Young's modulus of the cable is 20.6x1010N\/m2. Determine how much the cable stretches...", "stars": 3 }, { "url": "\/study-help\/questions\/in-a-marginal-tax-rate-system-as-tax-payers-make-1064349", "description": "In a marginal tax rate system, as tax payers make increasing amounts of money, the tax rate they pay on every extra unit of income increases incrementally as their income passes certain cutoffs (...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/troy-engines-ltd-manufactures-a-variety-of-engines-for-use-4273057", "next": "\/study-help\/questions\/the-amount-of-evidence-that-is-considered-sufficient-varies-with-4273059" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Question 2 Eagle Sawmill Limited (Eagle) operates a timber sawmill in a", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/question-2-eagle-sawmill-limited-eagle-operates-a-timber-sawmill-4273058" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } } }