MGAD30H3 Study Guide - Kontinental Hockey League, Kevlar, General Ledger

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5) the audit team should request the client for their reasoning on why the year-end provision for returns and allowances was set up for ,000. This number seems too low to account for the product quality issues which caused khl to already start returning the low quality kevlar sticks. Thus the provision needs to be revised by the client. For the reason of not having much information in the audit file on this issue, there needs to be more documentation included in the audit file on the product quality issues. There should a review done on the board of director minutes to check if mr. hockey is taking the returns and allowances of the kevlar sticks into consideration when calculating their allowance. We must also ensure that we ask the client to review the inventory through physical count and the journal entries and check if the kevlar sticks that were sent back were written down.

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