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Audit Simulation > Errors > Flashcards

Flashcards in Errors Deck (8):
1

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

2

Cash confirmation shows an outstanding loan was not recored

Completeness (Account Balances)

Failure to record a loan means that payables are Incomplete

3

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

Existence

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

4

Current portion of Long term debt remained in Long Term liabilities

Understandability and classification

GAAP requires current portion to be in current liabilities

5

Auditor found shipping documents without related sales invoices

Completeness (transactions and events)

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

6

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

7

Client purchase truck but did not obtain legal title

Rights and Obligations

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

8

mistake in amount posted to subledger

Accruacy