Auditing Questions Essay

365 words - 2 pages

11

ANALYTICAL PROCEDURES—RATIO ANALYSIS FORM

The auditor can use this form to document the performance and evaluation of ratio analysis in connection with analytical procedures performed in an audit. The form is only a guide and is not a substitute for professional judgment. The form may be modified by adding or omitting certain ratio analysis.

CLIENT NAME: | |

DATE OF FINANCIAL STATEMENTS: | |

LIQUIDITY RATIOS

20__ | 20__ | 19__ | 19__ |
1. Current ratio = | | | | |
Current Assets | | | | |
Current Liabilities | _____ | _____ | _____ | _____ |

Comments:
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20__ | 20__ | 19__ | 19__ |
2. Quick or acid test ratio = | | | | |
Current Assets - Inventory | | | | |
Current Liabilities | _____ | _____ | _____ | _____ |

Comments:
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PROFITABILITY RATIOS

20__ | 20__ | 19__ | 19__ |
1. Gross profit ratio = | | ...view middle of the document...

Return on total assets ratio = | | | | |
Net Income + Interest Expense | | | | |
Total Assets | _____ | _____ | _____ | _____ |

Comments:
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20__ | 20__ | 19__ | 19__ |
5. Return on equity ratio = | | | | |
Net Income | | | | |
Average Stockholders’ Equity | _____ | _____ | _____ | _____ |

Comments:
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LEVERAGE RATIOS

20__ | 20__ | 19__ | 19__ |
1. Debt to assets ratio = | | | | |
Total Debt | | | | |
Total Assets | _____ | _____ | _____ | _____ |

Comments:
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20__ | 20__ | 19__ | 19__ |
2. Debt to equity ratio = | | | | |
Long-Term Debt | | | | |
Stockholder’s Equity | _____ | _____ | _____ | _____ |

Comments:
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20__ | 20__ | 19__ | 19__ |
3. Times interest earned ratio = | | | | |
Income before Income Taxes and Interest | | | | |
Interest Expense | _____ | _____ | _____ | _____ |

Comments:
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ACTIVITY RATIOS

20__ | 20__ | 19__ | 19__ |
1. Inventory turnover = | | | | |
Cost of Goods Sold | | | | |
Average Inventory | _____ | _____ | _____ | _____ |

Comments:
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20__ | 20__ | 19__ | 19__ |
2. Average age of inventory = | | | | |
360 Days | | | | |
Inventory Turnover | _____ | _____ | _____ | _____ |

Comments:
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20__ | 20__ | 19__ | 19__ |
3. Accounts receivable turnover = | | | | |
Net Sales | | | | |
Average Accounts Receivable | _____ | _____ | _____ | _____ |

Comments:
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20__ | 20__ | 19__ | 19__ |
4. Days sales in accounts receivable = | | | | |
360 Days | | | | |
Accounts Receivable Turnover | _____ | _____ | _____ | _____ |

Comments:
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20__ | 20__ | 19__ | 19__ |
5. Asset turnover = | | | | |
Net Sales | | | | |
Total Assets | _____ | _____ | _____ | _____ |

Comments:
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Prepared by | | Date | |
Approved by | | Date | |

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