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Eyemax corporation audit case solution

03/04/2021 Client: muhammad11 Deadline: 2 Day

Need help with my Accounting question - I’m studying for my class.

Requirement and case are list below. About Audit Differences and Audit Adjustments.Requirement 1 “Users of financial statements can expect that if an unqualified opinion is issued by the auditor, there will be no errors, misstatements, or misapplications of Generally Accepted Accounting Principles in the financial statements and related footnotes.” React to this statement and include a discussion of how materiality relates to it. (4 pts) Requirement 2 Prepare the journal entries that would be necessary to adjust for each of the four misstatements provided in the case. Evaluate the total dollar effect of the adjustments on Total Revenues, Total Expenses, Net Income, Total Current Assets, Total Assets, and Total Liabilities. (This requirement can be hand written, and can be placed on another sheet of paper that can be excluded from your page count.) (5 pts) Requirement 3 Consider the audit sampling done in the area of accounts receivable. Should you only consider the known difference of $8,662? Why or why not? 5 pts) Requirement 4 Considering the materiality information given in the case, and your answers to the two above requirements, what is your overall conclusion about the proposed audit adjustments? Would you require management to record all of the audit adjustments listed above, would you require them to record only some, or would you allow them to pass on recording all of the audit adjustments? If you would only require them to post some, which ones would you choose, and why? (5 pts) Requirement 5 Ignore your answer to Requirement 4 above. Assume you found material errors in the financial statements and you required management to make some adjustments in order to ensure that the financial statements were free from material misstatements. Assume management refused to make those adjustments. Would you qualify your opinion on the financial statements? Why or why not? (5 pts) Requirement 6 Find the following article: An Empirical Investigation of the Auditor's Decision to Project Errors, by R.J. Elder and R.D. Allen, in Auditing: A Journal of Practice and Theory, Vol. 17, Issue 2. You can find the actual journal, or I recommend using the library database search engine (such as EBSCO) to find the article on the web.

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