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Hello Kim,
Regarding audit evidences for warranty provision,
1. A schedule analysing the total returns received following the year end. A sample of these returns should have been matched to the original sales invoice, confirming the date upon which the goods were first sold.
(I am happy with this one.)
2. This schedule should also have been analytically reviewed in comparison to the same period in previous years to identify whether returns levels were consistent. Any significant fluctuations should have been corroborated with evidence or management enquiry.
(As the audit manager is suspecting the estimate being made for warranty provision is inappropriate when reviewing the file, then why the above schedule is NOT being analytically reviewed in comparison to the same period of the forecast return to identify whether the actual return level is consistent with the forecast return level for the same period.)
Thank you.
Regards,
MarthewI am sorry Marthew but I have read and re-read your query and I do not understand what you are asking.
Hello Kim,
Audit evidence as per the printed solution includes the below:
A schedule analysing the total returns received following the year end. This schedule should also have been analytically reviewed in comparison to the same period in previous years to identify whether returns levels were consistent.
Can I change it to the below?
A schedule analysing the total returns received following the year end. This schedule should also have been analytically reviewed in comparison to the same period of the forecast return to identify whether the actual return level is consistent with the forecast return level for the same period.
I am so sorry to confuse you, and I think I am a bit confused now.
Regards,
MarthewI am sorry, but as I have said to other students on other posts, these forums cannot support such detailed answering advice. Published answers are not meant to be prescriptive and at the strategic level there will be more than one way of expressing essentially the same point.
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