II. Critical Thinking and Writing Skills In February, your new work assignment of work is the audit of Miramar Company's

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II. Critical Thinking and Writing
Skills
In February, your new work assignment of work is the audit of
Miramar Company's financial statement of 12/31/2021. The Manager in
Charge gives the following audit assignment: Prepare a summary that
describe the best practice in inventory accounting systems. The
summary is going to use in the evaluation of Miramar Company
systems.
III- Exercises
A. Explain why it is necessary to allocate the
preliminary judgment about materiality to individual accounts
(segments) in the financial statements. Also explain why allocating
to balance sheet accounts is more common than allocating to income
statement accounts.
B. Describe the audit risk model and each of
its components
C. Using the Audit Program for Cash and Audit
Program for Cash Extended, select 15 audit procedure and classify
each procedure according to the types of audit evidence. Present
your answer in the following table:
Audit Procedure
Type of Evidence
D. Complete the table with
assertion, specific risk assumption and recommended audit procedure
that apply:
Possible Misstatement
Assertion
Specific Risk
Audit Procedures
Cash is overstated because cash receipts reflected in the
accounts do not exist or disbursement were not recorded.