SPRANDEL, INC CASE Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

SPRANDEL, INC CASE Case Study Help

Closing Review Notes – Explanation

RN1: Adjust the date in the procedure to the correct date 31/12/20X4

RN2: Rectify the understated receivable record in working paper by comparing it against 101A AR.

RN3: Rectify understatement in diet water sales and receivable by performing assertion of confirmation and in case of nonresponse or response receive but inappropriate we also perform alternative procedure like completeness and accuracy on unconfirmed selections.

RN4: Additional selection for test of control because haphazard sampling won’t give appropriate result due to biasness on selection.

RN5: Perform assertion on remaining item of written off and perform test of control in order to ensure their accuracy.

RN6: As the misstatement occurred during test of detail, is an anomaly, so we are not considering it for projection but we will perform assertion of occurrence.

Conclusion:

AS the identified misstatement is lower the tolerable rate of misstatement therefore there is no need of modification on report.

Critical Thinking Questions

In order to confirm the existence of account receivable assertion of confirmation, providing most reliable audit evidence, because it provides information directly from the third party in response to a demand for information related to a particular item affecting assertion in the financial statement.
If the confirmation reply doesn’t receive from the third party, then the auditor would have to perform different other alternative procedures, which might involve evaluation of , shipping document, subsequent cash receipts and correspondence from third parties. The confirmation assertion obtains from Pennies Oil and Alligator Aid provide information, which is skeptical and therefore more audit procedure require in these area like accuracy.
Information obtain from write off approval, providing information regarding assertion of accuracy is mostly correct. This means that the client’s internal control is operating effectively, thereby increase in reliance on internal control helps in reducing the control risk and by different less substantive procedures, the auditors would be able to reduce the control risk and asset loss, which helps in ensuring that the plan information is complete and accurate, financial statements are reliable, and the plan’s operations are conducted in accordance with provisions of applicable laws and regulation.
Further Audit work perform on cut off pertains to assertion of occurrence and vouching.
Total of amount of exception identified, understate the current year receivable by $8731.20 and if it remains unadjusted, it would underestimate the next year current assets , ultimately affecting the quick ratio and working capital............................
SPRANDEL, INC CASE Case Study Help

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