Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 7, Problem 37DQP
a.
To determine
Determine the expected value from the given information.
a.
Expert Solution
Explanation of Solution
Audit Evidence: The piece of evidence provided by the audit team to prove their opinion with respect to the audit is known as audit evidence. It includes accounting information related to the evidence and their source.
Determine the expected value.
| Account | Expected value |
| Executive salaries | |
| Factory hourly payroll |
Increase due to 3% pay rate increase: Increase due to 8% increased production: |
| Factory supervisors’ salaries | |
| Office salaries | |
| Sales commissions |
Increase in commissions due to increased sales: |
Table (1)
b.
To determine
Compute the difference between the own expectation and client’s recorded amounts as percentage.
b.
Expert Solution
Explanation of Solution
Compute the difference between the expectation and client’s recorded amounts as percentage.
| Account | DIFFERENCEIN EXPECTEDAND RECORDED |
| Executive salaries | |
| Factory hourly payroll | |
| Factory supervisors’ salaries | |
| Office salaries | |
| Sales commissions |
Table (2)
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Students have asked these similar questions
You are auditing payroll for the Morehead Technologies company for the year ended October 31, 2019. Included next are amounts from the client's trial balance, along with comparative audited information for the prior year.
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(Note 1: When computing the expected value of factory hourly payroll, you must take into consideration both the 3% wage increase and the 8% increase in the number of units produced and sold. Note 2: Use the increase in the 10/31/2019 preliminary sales balance over the 10/31/2018 audited sales balance to
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Requirement b.…
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i (Click the icon to view the additional information.)
Read the requirements.
(Note 1: When computing the expected value of factory hourly payroll, you must take into consideration both the 6% wage increase and the 13% increase in the number of units produced and sold. Note 2: Use the increase in the 10/31/2019 preliminary sales balance over the 10/31/2018 audited sales balance to
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Factory supervisors' salaries
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Sales commissions (see Note 2)
(1)
Preliminary
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630,599
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During the audit of a manufacturing firm, you are performing audit data analytics based on the
payroll file. You are examining the reasonability of deductions as a percentage of gross wages for
the 12 months of the year and the results were summarized in the following scatter chart. Please
interpret the visualization. Discuss any notable items you identified, potential causes, and further
steps you would take.
• Deductions as a % of gross wages
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
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Chapter 7 Solutions
Auditing And Assurance Services
Ch. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - Prob. 8RQCh. 7 - Prob. 9RQCh. 7 - Prob. 10RQ
Ch. 7 - Prob. 11RQCh. 7 - Prob. 12RQCh. 7 - Prob. 13RQCh. 7 - Prob. 14RQCh. 7 - Prob. 15RQCh. 7 - Prob. 16RQCh. 7 - Prob. 17RQCh. 7 - Prob. 18RQCh. 7 - Prob. 19RQCh. 7 - Prob. 20RQCh. 7 - Define what is meant by a tick mark. What is its...Ch. 7 - Prob. 22RQCh. 7 - Prob. 23.1MCQCh. 7 - Prob. 23.2MCQCh. 7 - Prob. 23.3MCQCh. 7 - Prob. 24.1MCQCh. 7 - Prob. 24.2MCQCh. 7 - Prob. 24.3MCQCh. 7 - Prob. 25.1MCQCh. 7 - Prob. 25.2MCQCh. 7 - Prob. 25.3MCQCh. 7 - Prob. 26.1MCQCh. 7 - Prob. 26.2MCQCh. 7 - Prob. 26.3MCQCh. 7 - Prob. 27DQPCh. 7 - Prob. 28DQPCh. 7 - Prob. 29DQPCh. 7 - Prob. 30DQPCh. 7 - Prob. 31DQPCh. 7 - Prob. 32DQPCh. 7 - Prob. 33DQPCh. 7 - Prob. 34DQPCh. 7 - Prob. 36DQPCh. 7 - Prob. 37DQPCh. 7 - Prob. 40DQP
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