BU547- Midterm Exam Guide - Comprehensive Notes for the exam ( 31 pages long!)
Document Summary
Opening balances: fsi is moving from a ntr to a review engagement and is adopting aspe for the first time. With respect to opening balances, we will have to be careful since no review has been done on them. However, since the nature of the review is primarily inquiry, discussion and analytical procedures, there should not be a problem in determining plausibility of opening balances [no confirmations require; do not need to attend inventory count] To assess plausibility of inventory: mgmt. list of inventory should be obtained and reviewed, because no formal inventory tracking system in place. Inquire with mgmt why the costs of inventory during the year fluctuate to assess whether there is potential impact on inventory costing. Special reports type questions [make it situation specific for depth = case facts]: We would develop a list of procedures jointly with the client or the board; and we would report on the results of our procedures to the board.
