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Your firm is about to publish an audit opinion for your client, Nebula Nexus, but you just learned that your intern forgot to check for unrecorded liabilities. If a problem exists, it’s likely material. The partner is giving you 15 minutes to find any issues (if there be any), and she threatened to take away your bonus if you miss one—material or not. Fortunately, you have enough data to perform the search, but you’re a tad rusty with this portion of the audit.
- Download the data
- You’ll need to confirm that the payments made in January were included as liabilities on the balance sheet at year-end. Using a lookup function in column H of the Cash Disbursements sheet, find the corresponding Invoice Date for each Reference No. that’s reflected in the Vendor Invoice Detail sheet. If the reference number isn’t found, return the text “Not Found.”
- For each payment that isn’t found in the year-end report, you’ll need to investigate further. Copy all the missing payment information into columns G through K of the Receiving Report sheet.
- In column L of the Receiving Report sheet, use another lookup to find the date that the services or goods were received. The payments that are missing and received before year-end will be your unrecorded liabilities.
Suggestions and Hints
Lookups can be powerful when used correctly. If you’re getting an error, select the cell that contains the formula and confirm that you’ve used consistent, valid inputs. If you’re still getting an error, consider asking someone else in the office or check the spoilers for help.