Question

For this exercise, your client, Bright IDEAs Inc., has provided you with a listing of sales invoices. To test whether the client appears to have a receivables collectability problem, the auditor must complete a series of related steps: 1. Import the client's database of sales invoices (Excel File - ACC 546 Wk. 2 Practice Case Assignment Values Tab A). 2. Perform an aging analysis (Excel File - ACC 546 Wk. 2 Practice Case Assignment Values Tab B Required Data Files: In the Resources section of this question, you will see e-book, hints, and files. Select Files to download the Excel template to answer the questions below Required: Use the Excel File Template to answer the following questions. a. Upon downloading the Wk. 2 Practice Case Assignment Data File Template Worksheet, what is the total Number of Records? What is the Control Total for the GROSS_AMT Field? b. What percentage of customers have accounts that are aged greater than 90 days? c. What percentage of customer balances (net value) are aged greater than 90 days? d-1. Determine the effect that your findings in parts (b) and (c) would have on the auditor's assessment of the risk of material misstatement. d-2. Determine which of the given accounts and assertions are most likely influenced by your findings.

Answer 1

Answers:

Question	Answer	Explanation
A	Total Number of records shown by IDEA is 900	Gross Amount + GST +PST
	Control total of Gross Amount field shown by IDEA is 435864.35
B	Percentage of Customers have accounts greater than 90 Days is 8.30%	21/253
C	Percentage of Customer Balances (Net) have accounts greater than 90 Days is 12.24%	49724.04/406223.25
D1	As a Result of these findings, RoMM should be assesed Higher	As proposed standard deviation of the evaluated sample is of 2981, but in the given case, The Ageing above 0 Days is 49724.04, much higher that Standard deviation
D2	As in the evaluation of Aeging of recievables, The Risk of Material Misstatement related to Valuation is accounts recievables is likely to be higher.	As Provisions for Ageing are discretionary.