Purpose
INSTRUCTIONS
Format
- appropriate for a real world audit engagement. To do this, use the information found in the Apollo Shoes Case Study (Client File), textbook, course instructional material, and the Excel Workbook and the instructions detailed below to perform and properly document the substantive audit procedures for the Fixed Assets audit.
Requirements
You will perform substantive audit procedures as you would during fieldwork of an audit engagement. You will document your substantive audit procedures as well as identify and describe problem areas in the audit by collecting and examining information and evaluating evidence. Complete the Fixed Assets Audit by performing the following:
Read: All audits require reading and research. Do the following:
Review the Planning and Internal Controls sections of the Apollo Shoes Case Study (Client File). Note any policies and procedures, BOD activity, and other information relevant to the Fixed Assets section of the audit. https://lectures.mhhe.com/connect/1259573281/apoll...
Read the Fixed Assets section of the Apollo file.
Since we are in the fieldwork portion of the audit, you are no longer limited to only the Planning and Internal Controls sections of the audit. You now have access to all of the documentation in the Client file.
Create a new Excel Spreadsheet: To begin the process of performing the Fixed Assets Audit, you will need to create an Excel Spreadsheet based on the template provided.
AP #3.2 Template.xlsx
File Naming Convention:
Save the template file as an Excel spreadsheet (.xlsx).
When you save the template, you must change and update the file name. Use the following naming convention to save your file:
Note: There are no spaces in the file name.
ACC470SectionLetter-SemesterAndYear-CA.SPAP-LastName.FirstName
For example, if John Smith is in section AE (or BE or CE) of the course, John would use the following file name for the Excel spreadsheet file (.xlsx) depending on the semester and year (Fall = Fa, Spring = Sp, Summer = Su)
ACC470AE-Sp25-FixedAssets-Smith.John.xlsx
Read the following information about the tabs that should be included in the file:
Cover Page: Include a tab called “Cover Page” and include cover page information
Your name
Assignment
Course/Section/Semester/Year
TB: The Apollo Shoes Comparative Trial Balance (TB) is included in this file for reference and to complete your audit work.
Tab FA-1/Roll-forward Lead: Utilize the 10K Roll-forward tab FA-1. Use the following information.
Utilize the proper three-line heading of an audit work paper.
Use the format illustrated provided in the spreadsheet.
Identify all of the balance sheet related fixed asset accounts from the Apollo Shoes Comparative Trial Balance (TB). Link the data from the TB into FA-1.
Create a line for each account you identify and include the following information from the TB
Account number.
Account name.
Beginning balance.
Ending balance.
There are no disposals so all of the activity throughout the year is attributed to additions.
Enter the difference between the Beginning and Ending balances in the Additions column.
Create a line to indicate the Gross Value of the Fixed Assets and use formulas to calculate a subtotal line.
Create a line to indicate the Net Book Value of the Fixed Assets and use formulas to calculate a total line.
Use formulas to calculate the horizontal analysis for the
Dollar difference.
Percentage change.
Tab FA-2/Detailed Listing: Utilize the copy provided of the Prepared By Client (PBC) Detailed Listing Schedule found in the tab (from the Client File/Fixed Assets).
Substantive Audit Procedures: To audit Fixed Assets, perform the following:
Prepare and analyze the 10K Roll-forward Schedule (Lead Schedule)
Cross-reference the Ending Balances to the appropriate totals on the Detailed Listing.
Cross-reference the Additions to the appropriate totals on the Detailed Listing.
The only tickmarks on the Lead should be discussing the flux explanations.
All substantive audit procedures, testing, and additional documentation should be on the Detailed Listing w/p.
Perform substantive audit procedures on the Detailed Listing Workpaper
Reminder for PBC workpapers
You are auditing PBC’s, not fixing them.
Do not change numbers or “fix” anything on the PBC’s.
It is a PBC and must maintain its integrity with the following exceptions:
You may add rows and columns for tickmarks, cross-references, and other audit documentation.
You may change the formatting for font, font size, number (comma) format, etc.
Recalculate all of the depreciation expense values for all years and all items present based on Apollo Shoe’s policies and procedures as well as the requirements of US GAAP.
Cross foot the accumulated depreciation for each line item.
Foot the columns for each year.
In the cells under/following the Detailed Listing provided by the PBC, calculate totals for the various items necessary to cross-reference to the
Ending Balances on the Lead.
Additions on the Lead.
Include
The necessary intra-w/p cross-references on the Detailed Listing for these calculated items.
Formulas in all calculated cells
Underlines to indicate mathematical operations
Number (comma) formatting for all dollar values
All calculations, recalculations, and cross-references
Must be documented by the appropriate tickmarks (r, cf, f, or x-ref) under or to the right of the number, as appropriate for the t/m type.
Must match exactly (to the penny) to document the cross-reference. If they do not match exactly, prepare a reconciliation for the difference. If the difference is
Immaterial: Make the appropriate tickmark notation (i)
Material: Integrate knowledge from your financial accounting courses to fully analyze, discuss, and document the difference using both narrative discussion and computations through Excel formula calculations. If the difference is a client error, create a tickmark. Develop an approach to address it by documenting the requirements and rationale for the correction. Prepare an accurate and complete two-column journal entry to dispose of (correct) the issue.
3. These tabs must be cross-referenced to each other throughout the audit work so make sure you use the proper naming convention for all w/p tabs [W/p-# W/p_name] Deliverable
Submit one Excel file (.xls or .xlsx) with all of the requirements listed above performed on the following four tabs using proper tab naming conventions:
Cover Page
TB
FA-1 Lead Schedule
FA-2 Detailed Listing