Jillian is on the Big City Defense Company's audit with Andrew (described in
15-31) but has been assigned the task of performing tests of details of balances for
the investment account. She has never audited investments before and asks Andrew
for some advice.Andrew tells her that she needs to review which management assertions
are relevant for the investment account. Then she needs to understand appropriate
tests that will provide evidence on these assertions.
Required:
(a)What are management's key assertions for the investment accounts?
(b)How can Jillian utilize inspection in the tests of details of balances for investments?
How can she utilize confirmations? What evidence will these audit procedures
provide for the financial statement audit?

Question

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The Answer of Jillian is on the Big City Defense Company's audit with Andrew (described in
15-31) but has been assigned the task of performing tests of details of balances for
the investment account. She has never audited investments before and asks Andrew
for some advice.Andrew tells her that she needs to review which management assertions
are relevant for the investment account. Then she needs to understand appropriate
tests that will provide evidence on these assertions.
Required:
(a)What are management's key assertions for the investment accounts?
(b)How can Jillian utilize inspection in the tests of details of balances for investments?
How can she utilize confirmations? What evidence will these audit procedures
provide for the financial statement audit?

Jillian Is on the Big City Defense Company's Audit with Andrew