Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

1) From which one of the following evidence-gathering audit procedures will auditor get most assurance concerning existence of inventories?

Choose one:

a. Confirmation of inventories in a public warehouse
b. Auditor’s re-computation of inventory extensions.
c. Observation of physical inventory counts.
d. Written inventory representations from management.

2) When designing audit procedures, direction of tests is the vital step in satisfying:

Choose one:

a. Cutoff objective.
b. Completeness objective.
c. Classification objective.
d. Valuation objective.

3) Which of the following procedures will auditor most probably carry out in searching for unrecorded payables?

Choose one:

a. Vouch sample of creditor balances to supporting invoices, receiving reports, and purchase orders.
b. Compare ratio of accounts payable to purchases with prior year’s ratio.
c. Compare cash payments occurring after balance sheet date with list of creditors at year-end.
d. Reconcile receiving reports with related cash payments made just prior to year-end.

4) A common test is to account for the sequence of different types of documents, like duplicate sales invoices selected from sales journal, watching for omitted and duplicate numbers or invoices outside the normal sequence. This test provides evidence of:

Choose one:

a. Existence.
b. Completeness.
c. Neither completeness or existence.
d. Both completeness and existence.

5) The statement which best expresses auditor's responsibility with respect to events occurring between balance sheet date and the end of the audit examination is that:

Choose one:

a. the auditor is responsible for determining that proper cutoff has been made and performing general review of events occurring in subsequent period.
b. the auditor's responsibility is to find out that a proper cutoff has been made and that transactions recorded on or before the balance sheet date actually occurred.
c. the auditor has no responsibility for events occurring in subsequent period unless these events affect transactions recorded on or before balance sheet date.
d. auditor is fully responsible for events occurring in subsequent period and must extend all detailed procedures through last day of fieldwork.

6) The audit of the financial report includes initial approach of addressing fraud. How should an auditor address fraud in the planning stage?

Choose one:

a. The auditor must not be aggressive in its initial approach to fraud as trust may be lost by the client.
b. The auditor must realise that most people are honest and not automatically assume that fraud exists when planning the audit.
c. The auditor must consider the likelihood of fraud existing in the company in the planning stage.
d. The auditor must test for fraud in the planning stage by sampling accounts.

7) In many audits of sales transactions, no substantive tests of transactions are performed for completeness objective because:

Choose one:

a. understatements of assets and income are greater concern than overstatements.
b. overstatements of assets and income are a greater concern than understatements.
c. the unrecorded sales cause a reduction of accounts receivable; therefore, the ratios of the two financial statements will not be misleading.
d. it doesn't matter if income is understated because savings on income tax offsets the reduced revenue and net income is correct.

8) Before releasing the audit report, the auditor must

Choose one:

a. carry out analytical procedures.
b. estimate subsequent client fee for services.
c. give subsequent contingency disclosure.
d. issue a management letter.

9) If auditor of a financial report understands internal control and assesses control risk as low, it is supposed that internal control:

Choose one:

a. is considered relatively weak and will not be tested
b. has been assessed erroneously by auditor
c. is not required to be tested as it is considered strong
d. might be tested in the attempt to support assessment

10) Auditor considers internal control by 4 steps. What is the order for these steps:

i. Get understanding of internal control.
ii. Assess control risk.
iii. Perform tests of controls.
iv. Decide on planned detection risk and substantive testing

Choose one:

a. 4, 1, 2, 3
b. 2, 1, 3, 4
c. 1, 3, 2, 4
d. 1, 2, 3, 4

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M92673

Have any Question? 


Related Questions in Accounting Basics

Discussion 1-iasb and fasb mergersir david tweedie chairman

Discussion 1-IASB and FASB Merger? Sir David Tweedie, chairman of the International Accounting Standards Board (IASB), is quoted as saying that the IASB and the Financial Accounting Standards Board (FASB) will eventually ...

Palmona co establishes a 220 petty cash fund on january 1

Palmona Co. establishes a $220 petty cash fund on January 1. On January 8, the fund shows $125 in cash along with receipts for the following expenditures: postage, $41; transportation-in, $11; delivery expenses, $13; and ...

Part 1problem 2aagrichem industries manufactures fertilizer

Part 1 PROBLEM 2A AgriChem Industries manufactures fertilizer concentrate and uses cost standards. The fertilizer is produced in 500-pound batches; the normal level of production is 250 batches of fertilizer per month. T ...

To make sure you are up to date on the special guidelines

To make sure you are up to date on the special guidelines the GASB has declared, your manager asked you to research GASB Statement No. 56. He also asked you to show him, side by side, how government accounting journal en ...

1 the concept of cost-benefit permeates smart decision

1. The concept of "Cost-Benefit" permeates smart decision making and accounting principles. How does this concept relate to incremental analysis. Provide an example to illustrate your point. Cost Benefit Respond 2. A cos ...

1 the prices of financial assets are based on the expected

1. The prices of financial assets are based on the expected value of future cash flows, discount rate, and past dividends. A. True B. False 2. By using different discount rates, the market allocates capital to companies ...

Question 1which entry would record the payment of a utility

Question 1 Which entry would record the payment of a utility bill? A. Debit Utilities Expense; credit Cash B. Debit Cash; credit Utilities Expense C. Debit Utilities Expense; credit Accounts Payable D. Debit Accounts Rec ...

Construct a time series plot what type of pattern exists in

Construct a time series plot. What type of pattern exists in the data? Quarter Year 1 Year 2 Year 3 1 923 1112 1243 2 1056 1156 1301 3 1124 1124 1254 4 992 1078 1198 Use a multiple regression model with dummy variables a ...

After reading the article ernst amp youngs liability for

After reading the article "Ernst & Young's Liability for Lehman Larger Than Claimed," Discuss Ernst & Young's "going-on" liability after their 2007 arbitrary cutoff of responsibility from Lehman Brothers financial statem ...

Assume a local subway reported the following results for

Assume a local Subway reported the following results for April and May August September Unit Sales      2,000             2,500 Cost of Food Sold  $   1,000  $         1,250 Wages and Salaries      1,525             1,67 ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro