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Flashcards in Errors Deck (8):

Client bought property to be held for investment purposes. property value tripled and client reported FMV on F/S. Client uses GAAP.

Valuation and Allocation

GAAP says land held for investment should be shown at Historical cost


Cash confirmation shows an outstanding loan was not recored

Completeness (Account Balances)

Failure to record a loan means that payables are Incomplete


Auditor was unable to locate selected older assets. company disposed of them during the year


Assets on books and records that are retired - do not "Exist" anymore as of year end


Current portion of Long term debt remained in Long Term liabilities

Understandability and classification

GAAP requires current portion to be in current liabilities


Auditor found shipping documents without related sales invoices

Completeness (transactions and events)

Goods shipped may not be billed. (Sales are Incomplete)


Items listed on ledger that are older are shown to be obsolete and worthless

Allocation and Valuation

Obsolete or worthless items should be written down to NRV or Written off


Client purchase truck but did not obtain legal title

Rights and Obligations

If title did not transferred - owner technically doesn't have ownership Rights


mistake in amount posted to subledger