3) The Audit firm Dewy, Cheatham, & Howe was offered such a high fee to do an at

Question

3) The Audit firm Dewy, Cheatham, & Howe was offered such a high fee to do an attest
audit of Crook Puppy Investments (CPI) Ltd that they accepted. However, a week into the
audit, they found and documented in the audit working papers many serious
irregularities—including weak to non-existent internal controls, accounting clerks who are
living well beyond their means, large sums of investor (client) monies that are missing
and unaccounted for, evidence that CPI is engaging in money laundering for Bikie Gangs.  

4) The Management Representation Letter is prepared by the Auditor and signed by
senior management—the assertions within that letter ensure that management accepts
their responsibility for ensuring their organization's general purpose financial report
(GPFR) isTrue and Fair and verification of those clearly stated assertions provide a
focus for the audit.
List four key assertions should be made by the Crook Puppy Investments (CPI) Ltd
management and briefly discuss how they should be tested.  

Explanation / Answer

The Crook Puppy Investments (CPI) Ltd can check it’s financial activities by following four assertions:

These assertions will be done with balance sheets, income statements and other financial statements. With respect to the other assertions, Rights and obligations and Understandability assertions will also play important role for provide good information to management in their test.

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.