Discuss the below:
(Timing of substantive tests)
Q: Cook, CPA, has been engaged to audit the financial statements of General Department Stores, Inc, a continuing audit client, which is a chain of medium-sized retail stores. General's fiscal year will end on June 30, 20X6, and General's management has asked Cook to issue the auditor's report by August 1, 20X6. Cook will not have sufficient time to perform most of the fieldwork as of an interim date, April 30, 20X6. For the accounts to be tested at the interim date, Cook will also perform substantive tests covering the transactions of the final two months of the year. This will be necessary to extend Cook's conclusions to the balance sheet date.
Required:
a. Describe the factors Cook should consider before applying principal substantive tests to General's balance sheet accounts at April 30, 20X6.
b. For accounts tested at April 30, 20X6, describe how Cook should design the substantive tests covering the balances as of June 20, 20X6, and the transactions of the final two months of the year.