80.2K

Verified Solution

Link Copied!

$13-13$ Auditing Property& Casualty Insurance

During an audit of the financial statements of Custer$-$McClurg, Inc., Timothy Barnes, the engagement manager, requested and received a client$-$prepared property & casualty insurance spreadsheet that included information about premiums.

Required:

$1.$ Identify the type of information, in addition to premium information, that would ordinarily be included in a property & casualty insurance schedule.

$2.$ What audit procedures should Barnes perform to test the client$-$prepared property & casualty insurance schedule?

$13-16$ earnings Manipulation and Environmental Liabilities

During the planning stage of an audit, the engagement partner and manager tour the assembly facilities of York Chemicals, a manufacturer and supplier of chemical solvents to auto body shops nationwide. Solvent is stored in forty$-$gallon drums stacked by stock number in a warehouse awaiting shipment. Fifty yards from the assembly plant, but within a chain link fence that surrounds the property, is a ditch containing damaged barrels. Oil seepage is apparent beneath the barrels and on the unpaved roadway leading to the ditch.

Required: Identify, and explain the motive for, the key questions an auditor should ask management about the ditch, damaged barrels, and seepage.

Answer & Explanation Solved by verified expert

See Answer