Auditing: Chapter 10 ; 11 Quiz – Flashcards
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The balance sheet classification of investments by management should be confirmed with outside parties
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false
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The preferred source of fair values for investments is management's estimate of what the market value should be
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false
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The typical business activity of the finance and investment cycle would not include
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reconciliation of cash
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Selecting a sample of paid notes and tracing interest to the general ledger account is a test of the PCAOB assertion for
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completeness
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The typical assertions related to investments and related accounts would not include the PCAOB assertion that
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Capitalized intangible costs relate to intangibles acquired in exchange transactions
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The decision of a company to have a transfer agent handle exchanges of shares is related primarily to which of the functional responsibilities?
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Custody
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_______ approved by the board of directors constitutes the authorization for capital asset acquisitions and investments
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Capital budget
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Interim testing is ordinarily done prior to the date of the financial statements
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True
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Auditors are not responsible for evaluating the accuracy of management's estimates but the reasonableness of those estimates
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True
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While useful, analytical procedures are not required in the final review stages of the audit
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False
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The existence of "miscellaneous" revenue or expense accounts may signal the practice of earnings management
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True
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Which of the following events or activities may occur following the audit report release date?
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Subsequently discovered facts
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Interim testing normally occurs between which two dates?
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Beginning of the year under audit and date of the financial statements
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Roll-forward work normally occurs between which two dates?
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Date of the financial statements and date of the auditors' report
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For which of the following objectives would auditors be least likely to use analytical procedures in the completion stages of the audit?
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Obtaining evidence about assertions related to account balances or classes of transactions
