Pengantar Praktik Pengauditan

Tugas pertemuan 9
Liabilities

Nama Kelompok :

1. Kevin Prianto 041711333181

2. Dwi Lestari 041811333018
3. Nur Indah 041811333034
4. Salsabila Nabilah Aliyah 041811333248

Kelas: O
Kelompok : 10

FAKULTAS EKONOMI DAN BISNIS

UNIVERSITAS AIRLANGGA
SURABAYA
2020
 AUDIT PLAN – LIABILITIES

Audit Objectives :
1. All liabilities existing at the balance sheet date have been stated in the
financial statements correctly and completely (accuracy and completeness)
2. Debt listed in the financial statements belongs to the company (right and obligation)
3. Examine whether the purchases have been properly classified and disclosed under
the appropriate account heads (Presentation and Disclosure)
4. The cut-off has been done properly

Audit Procedures : REF

Accounts Payable
1. Obtain a trial balance of recorded accounts payable as of year-end.
a. Foot it and trace the total to the general ledger account. L-1, N-1
b. Vouch a sample of balances to vendors' statements. Review L-2
the trial balance for related-party payables.
2. When concerned about the possibility of unrecorded payables, send
confirmations to creditors, especially those with small or zero balances L-3
and those with whom the company has done significant business.
3. Conduct a search for unrecorded liabilities by examining open vouchers,
vendors' invoices and statements received, and cash payments made for L-3
a period after year-end.
4. Inquire about terms that justify classifying payables as long term instead
of current. N-1

Other Current Liabilities

1. For estimated liabilities, such as warranties, determine and evaluate the
basis of estimation, and recalculate the estimate. L-1

2. Obtain written client representations about related party payables and

pledges of assets as collateral for liabilities. L-3
 Apollo Shoes, Inc. L-1
Schedule of Current Liabilities Prepared by Indah
PBC For Year Ended 12/31/2014 Reviewed by Darlene W
Adjustments
Acct 2014 Audited
# Account Title 2013 2014 WP AJE # Debit Credit Balance
20000 Accounts Payable PY $4,633,118.09 GL $1,922,095.91 L-2 #9 $12,800,105.97 4,722,201.88
PY $1
22000 Income Taxes Payable $0.00 GL $0.00 0.00
23100 Sales Tax Payable PY $0.00 GL $0.00 $0.00
23200 Wages Payable PY $29,470.32 GL $0.00 #10 $236,172.00 $236,172.00
23300 FICA Employee Withholding PY $1,318.69 GL $8,439.65 $8,439.65
23350 Medicare Withholding PY $583.99 GL $11,414.99 $11,414.99
23400 Federal Payroll Taxes Payable PY $6,033.01 GL $118,086.12 $118,086.12
23500 FUTA Tax Payable PY $0.00 GL $0.00 $0.00
23600 State Payroll Taxes Payable PY $2,815.47 GL $55,106.86 $55,106.86
23700 SUTA Tax Payable PY $0.00 GL $0.00 $0.00
23800 FICA Employer Withholding PY $1,318.69 GL $8,439.65 $8,439.65
23900 Medicare Employer Withholding PY $583.99 GL $11,414.99 $11,414.99
24600 Interest Payable PY $0.00 GL $0.00 N-1 #13 $419,920.90 $419,920.90
24700 Bonuses Payable $0.00 $0.00 #14 $450,000.00 $450,000.00
24800 Dividends Payable PY $0.00 GL $0.00 #12 $860,000.00 $860,000.00
Total Liabilities PY $4,675,242.25 $2,134,998.17 $0.00 $14,766,198.87$16,901,197.04
f f f f f
f – footed GL – agreed to trial balance on GA-6
PY – Agreed to P/Y Workpapers
AJE#9 Cost of Goods Sold $8,434,889.09
Utilities $ 15,216.88
Auditing Fees $ 750,000.00
Legal fees $3,600,000.00
Accounts Payable $12,800,105.97
To record unrecorded liabilities discovered when reviewing subsequent cash disbursements L-2
 Conclusion :

From all the audit procedure that have been performed, we found that there is significant material
account in Liabilities but the company accept recommendation from auditor for adjustment. So, we can conclude tha
 Apollo Shoes, Inc. L-2
Accounts Payable Schedule Prepared by Dwi L
For Year Ended 12/31/2014 Reviewed by Darlene W
PBC
Adjustments Audited
List of Approved Vendors Balance Debit Credit Balance WP
#
Anglonesian Institute for $0.00 $8,434,889.09 $8,434,889.09 L-3
Reprograming and Rehabilitation

B. Franklin's LP&E $0.00 $15,216.88 $15,216.88 L-3

Fleur de Lis Catering $6,868.12 $6,868.12 L-3

Just Boxes $0.00 $0.00 %

Lawyers "R" Us, LLC $1,902,224.45 3,600,000 $5,502,224.45 L-3

Office Hacks Supplies $1,117.19 $1,117.19 L-3

Sign Up! $4,994.99 $4,994.99 L-3

Smart Chip $0.00 $0.00 %

Squint Telephone and Cellular $6,891.16 $6,891.16 L-3

Synergizer Battery Company $0.00 $0.00 %

Tiger Jaguar Dealership $0.00 $0.00 %

Zrocks $0.00 $0.00 %

Anderson, Olds, and Watershed $0.00 $750,000.00 $750,000.00 GA-1

$1,922,095.91 $12,800105.9 $14,722,201.88

7
L-1 L-1 L-1

% No amount was due for these customers

AJE#9 Cost of Goods Sold $8,434,889.09

Utilities $ 15,216.88
Audit Fees $ 750,000.00
Legal Fees $3,600,000.00
Accounts Payable $12,800,105.97

To record unrecorded liabilities.

 Apollo Shoes, Inc. L-3
Search for Unrecorded Liabilities For Year Ended 12/31/2017 Prepared by Nabilah
Reviewed by Darlene W

From Cutoff Bank Statement: From Check Register From Voucher Packet
Date of
Check Date Amount Check Payee Invoice Date Description
3622 1/13/15 $6,683.93 1/10/2015 Smart Chip 12/27/2014 Annual computer
maintenance contract—2015
3623 1/13/15 $2,937.13 1/10/2015 Tiger Jaguar Dealership 1/9/2015 Automobile maintenance on
1/9/15
3624 1/14/15 $6,868.12 L-2 1/10/2015 Fleur de Lis Catering 12/31/2014 Catered Holiday party
3625 1/13/15 $124.81 1/10/2015 Office Hacks 1/13/2015 Office supplies purchased
1/7/15
3626 1/13/15 $15,216.88 L-2 1/10/2015 B. Franklin's LP&E 1/6/2015 "For December electricity"
3627 1/13/15 $6,891.16 L-2 1/10/2015 Squint Cellular 1/5/2015 December telephone bill
3628 1/13/15 $6,025.43 1/10/2015 Sam Shaw N/A Car washes for fleet of
automobiles on 1/13.
3629 1/13/15 $927.09 1/10/2015 Just Boxes 1/7/2015 Packaging material ordered
1/7.
3630 1/14/15 $8,419.69 1/10/2015 Synergizer Battery Company 1/3/2015 The goods were received on
January 6 with bill of lading
showing a January 3 shipping
date and marked FOB,
Shipping - Chicago.
3631 1/14/15 $8,434,889.09 L-2 1/10/2015 Anglonesia R&R Institute 12/26/2014 The receiving report was
dated December 30. The
accounts payable clerk
indicated that the office party
was held the afternoon of the
30th and the receiving report
 was probably not forwarded
until the next working day so
was not included in year-end
accounts payable. This
inventory was counted and
included in the physical
inventory at the end of the
year.
3632 1/14/15 $1,117.19 L-2 1/10/2015 Office Hacks 12/31/2014 Business cards, picked up
12/30/14
3633 1/13/15 $6,924.96 1/10/2015 Smart Chip 1/13/2015 Computer purchased 1/10/15
3634 1/14/15 $4,994.99 L-2 1/10/2015 Sign Up! 12/31/2014 New logos on vehicles on
12/31/14
3635 1/13/15 $5,174.00 1/10/2015 Zrocks 1/13/2015 Copy machine purchased
1/13/15
3636 1/13/15 $585.28 1/10/2015 Smart Chip 1/13/2015 Computer supplies picked up
1/10/15

Note: Check No. 3628. Sam Shaw is an employee of the firm. Although only a few thousand dollars, this is an exorbitant
amount for washing the limited number of Apollo owned cars, and is also a related party transaction.
 Apollo Shoes, Inc. N-1
Notes Payable Schedule For Year Prepared by Kevin
Ended 12/31/2014 Reviewed by Darlene W

PBC (Audited) Unaudited Audited

Balance Balance Adjustments Balance
Acct # Account Title 12/31/13 12/31/14 AJE# Debit Credit 12/31/14
27000 Notes Payable-Noncurrent $0.00 $12,000,000.00 AJE #11 $12,000,000.00 $0.00 B-3
TB TB

24100 Line of Credit $10,000,000.00 $44,403,000.00 $44,403,000.00 B-3

TB TB

24200 Current Portion Long-Term Debt $0.00 $0.00 AJE#11 $12,000,000.00 $12,000,000.00 B-3
TB TB

$10,000,000.00 $56,403,000.00 $12,000,000.00 $12,000,000.00 $56,403,000.00

f f f f F
f – footed
TB – agreed to trial balance on GA-6

AJE#11
3
N-1-1 270000 Notes Payable-Non Current $12,000,000.00
24200 Current Portion LTD $12,000,000.00

To reclass from LTD to Current

AJE #13
N-1-1 Interest Expense 419,920.90
Interest Payable 419,920.90

An entry must be made to accrue interest expense on the line of credit

for December.
 N-1-1
Notes Payable Roll Forward
For the Year Ended 12/31/2014

Year-End Balance 12/31/2013 $ 0.00 N-1

Additions 12,000,000.00 B-3, GA-3.1
Payments (0.00)

Year-End Balance $12,000,000,00 N-1, *

* As noted on B-3 and GA-3.1, the $10,000,000 line of credit was rolled into a $12 million note payable. This debt is due on
1/1/2015, so it is reclassed to current.

AJE #11 27000 Notes Payable-Non Current $12,000,000.00

24200 Current Portion LTD $12,000,000.00

Line of Credit Roll Forward

For the Year Ended 12/31/2014

Year-End Balance 12/31/2013 $ 10,000,000.00 N-1

Additions 44,403,000.00 B-3, GA-3-2
Deletions ( 10,000,000.00) B-3, GA-3-1

Year-End Balance $ 44,403,000.00 N-1

Note: The original LOC of $10,000,000.00 was rolled into a $12,000,000 note payable on 2-2-14. On 6/1/14 a new LOC of
$44,403,000 was entered into.
 Interest Expense Accrual
For the Year Ended 12/31/2014

Interest Expense Accrual 12 months 6 months Total Expense t

per X-1

1) Line of Credit 9.16% $44,403,000 7/1/2014 N/A $2,033,657.40 $2,033,657.40

2) Long Term Note Payable 8.15% $12,000,000 1/2/2014 $978,000.00 N/A $978,000.00

Total Accrual for Year End $3,011,657.40 2,591,736.50 7.26

Note: Based on the interest calculation, total interest expense for the year should have been
$3,011,657.40 and only $2,591,736.50 was recorded. Thus, an adjustment
of $419,920.90 is required. This understated interest expense amount is very close to 1 month’s
worth of interest, which is consistent with the bank confirmation that says interest has only been paid
through 11/30/2014.

AJE# 13 Interest Expense 419,920.90

Interest Payable 419,920.90