Davis & Smith Finance Analysis Help With Solution
Part I. Fraudulent Financial Reporting
Davis & Smith, CPAs, have performed a variety of audit tests as part of their audit of Silva Inc. and must now evaluate their results. For each of the following situations, identify whether the selected balance (shown in parentheses) is overstated, understated, or fairly stated.
Effect on Financial Statement Item in parentheses (Overstated, Understated, or Fairly Stated)
1. One of Silva’s suppliers shipped goods to Silva on December 26, Year 1, FOB destination, with a scheduled arrival date of December 30, Year 1. The goods did not arrive at Silva’s receiving dock until January 2, Year 2. The goods were included in Silva’s ending inventory based on the scheduled arrival date of December 30. (inventory)
2. On December 31, a major customer of Silva’s requested a rush order of goods. Silva shipped the goods just before the close of business on the 31st, FOB shipping point. Silva did not include the goods in its year-end inventory balance. (inventory)
3. One of Silva’s customers is holding goods on consignment for Silva. The goods were delivered to the customer on December 31, Year 1. Silva has included the retail value of these goods in its sales for Year 1. (sales)
4. December 31, Year 1 falls on a Wednesday, but Silva pays its employees on Fridays. The payroll expense for the year includes all checks written through December 31. (expense)
5. On December 31, Silva sold goods to a related party. The goods were sold above Silva’s cost but below the normal retail value. (sales)
Part II. Audit Report (12 points)
In auditing the long-term investments account, Patrick, CPA, is unable to obtain audited financial statements for an investee located in a foreign country. Patrick concludes sufficient appropriate audit evidence regarding this investment cannot be obtained.
For each of the situations listed below, identify the appropriate opinion type and report modification by selecting from the options provided.
How it Works
How It works ?
Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention product code mentioned in end of every Q&A Page. You can also send us your details through our email id email@example.com with product code in the email body. Product code is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.
Step 2:- While filling submit your quotes form please fill all details like deadline date, expected budget, topic , your comments in addition to product code . The date is asked to provide deadline.
Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id firstname.lastname@example.org and email@example.com must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.
Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.
Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.
Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.
Features for Assignment Help
We believe in providing no plagiarism work to the students. All are our works are unique and we provide Free Plagiarism report too on requests.
We believe in providing perfect, relevant and 100% accurate solutions to the student as per questions asked. All our experts are perfect in providing that so as to give unique experience to the students.
We are the only service providers boasting of providing original, relevant and accurate solutions. Our three stage quality process help students to get perfect solutions.
All our works are kept as confidential as we respect the integrity and privacy of our clients.
- Physics Assignment Help
- Chemistry Assignment Help
- Engineering Assignment Help
- Psychology Assignment Help
- Online exam Help
- Marketing Assignment Help
- Arts Assignment Help
- Sociology Assignment Help
- Project Management Assignment
- Case Study Help
- Nursing Assignment Help
- Research Assignment Help
- Operations Management Assignment help
- Accounting Assignment Help
- Biology Assignment Help
- Mathematics Assignment Help
- English Assignment Help
- Business Plan Help
- Essay Writing Help
- Human Resource Assignment Help
- Accounting Homework Help
- Computer Science Assignment Help
- Finance Assignment Help
- Economics Assignment Help
- Statistics Homework Help
- Management Assignment Help
- Strategy Management Assignment Help
- Auditing Assignment Help
- Information Management Assignment Help
- Online Assignment Writing help
- Best Assignment Help
- Humanities Assignment help
Part III. Audit Opinion (6 points)
An entity has changed its depreciation method for production equipment from the straight line method to a units-of-production method based on hours of utilization. The entity’s auditor concurs with the change although it has a material effect on the comparability of the company’s financial statements.
1. Select those opinion types which can be used from the following.
B. “Except for” qualified
2. Select the appropriate report modification.
A. Issue the standard auditor’s report without modification
B. Modify the introductory paragraph
C. Modify the opinion paragraph
D. Add an explanatory (emphasis-of-matter) paragraph preceding the opinion paragraph
E. Add an explanatory (emphasis-of-matter) paragraph following the opinion paragraph
Part IV. Research
The audit of Joyful Company for the year ended September 30, 2013, is near completion. Your senior, David Meyers, at Tyler & Tyler CPAs, has asked you to draft the audit report, considering the following:
• During fiscal year 2013, Joyful Company changed its depreciation method. The engagement partner concurred with this change in accounting principle and its justification, and Meyers wants it properly reflected in the auditors’ report; the change is discussed in Note 7 to the financial statements.
• The 2013 financial statements are affected by an uncertainty concerning a lawsuit over patent infringement, the outcome of which cannot presently be estimated. Meyers has suggested the need for an explanatory paragraph in the auditors’ report related to this matter which is discussed in Note 4 to the financial statements.
• The financial statements for the year ended September 30, 2012, are to be presented for comparative purposes. Wilson & Wilson previously audited these statements and expressed a standard unqualified opinion.
Note: For each required research, please identify the source (e.g., AU### paragraph ##; or AS### paragraph ##) and also copy the appropriate paragraph(s).
1. Identify the paragraphs in the professional standards that provide guidance regarding the modification of the audit report for the change in accounting principle.
2. Identify the paragraph in professional standards that provides the guidance regarding the modification of the audit report for the uncertainty
3. Identify the paragraphs in the professional standards that provide the guidance regarding the effect of Wilson & Wilson’s opinion on the 2012 financial statements on Tyler & Tyler’s audit report on the 2013 financial statements.
Product Code :Fin92
To get answer for this question, kindly click here (Note: Don’t forget to write the product code in comment section)
You can also email us at firstname.lastname@example.org but please mentioned product code in the mail body while sending emails.You can browse more questions to get answer in our Q&A sections here.