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scarlet
(d) Describe substantive procedures the auditor should perform to obtain sufficient and appropriate audit evidence in respect of the redundancy costs.
For this question, obtain a written representation from management confirming the completeness of costs.
1. Why is it written in the book completeness of costs instead of completeness of the redundancy provision
Which is correct and better
Also recalculate the redundancy provision to confirm completeness
2. how does recalculating the redundancy provision confirm completeness
3. Does recalculating the redundancy provision confirm accuracy also
In the interests of this forum being of assistance to all AA students, please reflect on whether it is helpful to have three different posts captioned “march 20”. A student might have a Q about Scarlet, however. So a better subject line would have been “Scarlet (M20) substantive procedures” or “Scarlet (M20) redundancy provision”.
1. It is one and the same – the D/E would be:
Dr Costs/expense
Cr ProvisionIf one is complete, the other must also be complete by virtue of the double-entry.
2. Suppose there are 10 employees to be made redundant and they are each entitled to 1 week’s pay for every year of employment (this is no Scarlet – I am just making something up to illustrate the point). The auditor recalculates the provision – each employee’s weekly pay x no. of years worked – summed – and the total is $18,560 … company has made a provision of $18,500 … does that look complete to you? (Answer yes)
3, Yes
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