ACCT 475 Lecture 21: ACCT 475 – Lecture 21
16 Jan 2018
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Chapter 10: substantive testing and balance sheet accounts. Most important assertions: existence, valuation & allocation: existence. Ve(cid:396)if(cid:455) ite(cid:373)s (cid:396)e(cid:272)o(cid:396)ded i(cid:374) (cid:272)lie(cid:374)t"s fi(cid:454)ed asset (cid:396)egiste(cid:396) Physically sight assets listed in first audit and periodically for subsequent audits. Focus on additions and disposals in later years. Reasons for lowered gross profit market and evidence you need: lower prices. Master price list to price sale of goods (this year vs last year) Different price list throughout the year and compare year to year. Market conditions look at competition, market in general is experiencing lower prices? (inherent risk: higher cost to manufacture. Payroll labour has 2 components (# of hours, and skilled labour minimum wage rises frequently) Cost sheets of products (compare last year to this year) Vouch to invoices to look at freight rates, etc: lower margin products were sold. Sales by product line top line revenue (what kinds of products are we selling?)
