Outline for the Audit of Ford Motor Company

Document Type:Essay

Subject Area:Economics

Document 1

In this context, some important issues to be dealt with along the way of auditing Ford Motor Company will include: i. Whether all the transactions by the company have been made in compliance with Ford Motor Company’s Financial Regulations and legislative authority. ii. Whether the accounting principles applied in the financial auditing period are consistent with the principles applied in the preceding financial period. iii. The different types of evidence that will be gathered to audit Ford Motor Company are: a. Physical examination This involves inspecting or counting tangible assets at Ford Motor Company. Physical examination is an important type of evidence when testing physical assets such as equipment or inventory. Gathering this type of evidence will simply involve counting or inspecting tangible assets.

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b. Observation This type of evidence for audit entails witnessing the physical activities of the company. It is different from physical examination in that observation focuses on the company’s activities while physical examination counts tangible assets. Gathering this type of evidence involved watching the company’s employees do their jobs. This type of evidence is important because it enables an understanding of how the job is done. The evaluation of all the four types of evidence will involve comparing the relationships to establish whether the account balances or other data appear reasonable compared to the expectations of the auditor. Qualitative guidelines Qualitative guidelines are based on subjective decisions. The discovery of qualitative misstatements or omissions could be an indication that more qualitative omissions may exist within the company’s financial statements.

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