Using the case study Jims Auto Body, prepare an audit program to audit revenue.

Using the case study Jims Auto Body prepare an audit program to audit revenue. You will use all of the relevant management assertions as the audit objectives and you should include the following: Management assertions to be addressed (audit objectives) Internal control Test of controls Substantive test of transactions Part 1 After the audit program has been drafted identify the type of report that will be produced as a result of the audit of revenue and develop the audit report. Part 2 The American Institute of Certified Public Accountants (AICPA) professional standards provide uniform wording and format for the audit report. The audit report should focus on the revenue cycle and Jims Auto Body. Write a 1-page audit report for Jims Auto Body that includes all seven parts of a standard audit report as follows: Report title Audit report address Introductory paragraphs Scope paragraph Opinion paragraph Name of the Certified Public Accountant (CPA) firm Audit report date Jims Auto Body (Inc. or LLC) 1122 Sesame Street New York NY 10002 EIN 90-1234567 Dated incorporated January 1st 2010 Jim Jameson 8701 Electric Avenue New York NY 10002SSN: 123-45-6789 Jim Jameson took on Fred as a partner for the LLC. Fred owns 50% of all profits losses and capital. You do not have to complete Part 2 K L or M on the 1065 Schedule K1 (there is not enough information provided). $4 500 salary expense is officers compensation for the corporation and guaranteed payment to partners for the LLC. $55 000 equipment is 7-year property in its 5th year of service and was placed into service in the middle of the year thus using the half-year convention. Use the correct table from the IRS”Publication 946: How to Depreciate Property”to determine the tax deductible depreciation. Form 4562 is not required. Jim made four quarterly estimated tax payments of $800 each over the course of the year. In accordance with IRS instructions: Corporations with total receipts and total assets at the end of the tax year less than $250 000 are not required to complete Schedules L M-1 and M-2 (Internal Revenue Service n.d.). This also applies to the LLC. For the 1065 Schedule K1 you will not have enough information to fill out Part 2 K L and M. Jims Auto BodyRevenues:Service Revenue 28 000 Total Revenue 28 000 Expenses:Salary Expense 4 500 Rent Expense 1 Utility Expense 300 Depreciation Expense 500 Insurance Expense 100 Supply Expense 400 7 000 Net Income 21 000 Jims Auto Body Balance Sheet As of April 30 2015 AssetsCash 101 800 Acct Recable 20 000PP In 1 100 Equipment 55 000Accu. Dep. 500 Supplies 2 600 Total Assets 180 000

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