Question
Fred Oatly is the loan officer of the National Bank of Dallas. National has a loan of $260000 unpaid to Regional Delivery Service a company specializing in delivering products of all kinds on behalf of smaller companies. National's collateral on the loan consists of 35 unimportant delivery trucks with an average original cost of $17,000. Oatly is concerned about the collectability of the unresolved loan and whether the trucks still exist. He subsequently engages Susan Virms, CPA, to count the trucks using registration information held by Oatly. She was engaged for the reason that she spends most of her time auditing used automobile as well as truck dealerships and has extensive particular knowledge about used trucks. Oatly requests that Virms issue a report sating the following-
1) Which of the 35 trucks is parked in Regional's parking lot on the night of June 30, 2009?
2) Whether all of the trucks are possessed by Regional Delivery Service.
3) The condition of all truck, using the guidelines of poor, good and excellent.
4) The fair market value of all truck, using the current blue book for trucks, which states the estimated wholesale prices of all used truck models and likewise using the poor, good and excellent condition guidelines
Required
a) For all of the following parts of the definition of auditing, state which part of the preceding narrative fits the definition?
1) Information
2) Established criteria
3) Accumulating and evaluating evidence
4) Competent, independent person
5) Reporting results
b) Identify the greatest problems Virms is likely to have doing the audit