Test Answers on auditing

Chapter 5 AUDIT

Administrative working papers Working papers specifically designed to help the auditors in the planning and administration of the engagement, such as audit plans, internal control questionnaires and flowcharts, time budgets, and engagement memorandum. Audit evidence Any information that corroborates or refutes the auditors’ premise that the financial statements present fairly the client’s financial position and […]

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Audit Chapter 6

question audit process answer 1. Plan the audit. – Use a risk-based approach which continually considers the possibility of material financial statement misstatements 2. Obtain an understanding of the client and its environment, including internal control. – Risk assessment procedures are used to gather information and include inquiries of management, analytical procedures, observation and inspections, […]

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Auditing Chapter 24

question commitments answer agreements that the entity will hold to a fixed set of conditions, such as the purchase or sale of merchandise at a stated price, at a future date, regardless or what happens to profits or to the economy as a whole question completing the audit checklist answer a reminder to the auditor […]

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Aural Rehab – Auditory Training

question Goal of auditory training answer To improve perception of speech or sound through the auditory modality question For directions/explanations… answer Use clearest mode of communication for your client, whatever his/her best mode of communication is question For auditory training, assessment and therapy tasks should be… answer Auditory only; cover mouth with your hand, turn […]

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Audit of sales and collection cycle

question Sales Accounts answer Revenue, Accounts Receivable question Sales’ Business functions answer Process Customer Order Granting credit Shipping good Billing customers Recording sales question Sales’ Docs and Records answer Customer order Sales order Shipping document Sales invoice Sales transaction file Sales journal Accounts receivable master file Monthly statement question Cash receipt accounts answer Cash in […]

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Chapter 16: Audit of Sales and Collection Cycle

question 1) The two primary classes of transactions in the sales and collection cycle are: A) sales and sales discounts. B) sales and cash receipts. C) sales and sales returns. D) sales and accounts receivable. answer B question 2) The appropriate and sufficient evidence to be obtained from tests of details must be decided on […]

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Chapter 14: Audit of Sales & Transaction Cycle

question Cash Receipts answer Overall objectives and concepts are the same as for sales Potential for theft is great (it is difficult to determine if cash was recorded) Problem: Lapping Procedure: Proof of Cash Audits of each of these cycles can be performed independently of each other, but it is best to do them together […]

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Auditing Ch 6

question A successor auditor is required to attempt communication with the predecessor auditor prior to: answer Accepting the engagement question An abnormal fluctuation in gross profit that might suggest the need for extended audit procedures for sales and inventories would most likely be identified in the risk assessment phase of the audit by the use […]

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Auditing Exam 1 Chapter 1

question The Sarbanes-Oxley Act applies to which of the following companies? A. All Companies B. Privately held companies C. Public Companies D. All public companies and privately held companies with assets greater than $500 million answer C. Public Companies question What is considered Audit Evidence. a. Oral Statements made by management b. Written Communications c. […]

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Audit 1 – Financial Accounting

question Principals & Agents relationship leading to demand for auditors answer Agents- managers Principals- stockholders Conflict of interest Principal hires agents to manage resources. Agents hire auditors to report on fairness of FS. Auditors gather evidence & add credibility. question Describe the relationship between internal controls, individual transactions, & account balances answer Internal controls are […]

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CPA Audit – Audit Engagement Field Work

question To obtain sufficient appropriate evidence to substantiate an account balance, the auditor performs substantive testing. Substantive testing is designed to reduce detection risk so that actual risk is decreased to an acceptable level for one or more assertions. What are the three types of substantive testing, and how are the defined? answer Substantive testing […]

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Chapter 11 Audit TB

question 1. Which of the following events or activities may occur following the audit report release date? A. Interim testing B. Roll-forward work C. Subsequent events D. Subsequently discovered facts answer d question 2. Interim testing normally occurs between the ____ and the ____. A. beginning of the year under audit; audit report release date […]

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CH 13 AUDIT

question 1. The auditors’ approach to the audit of PPE largely results from the fact that relatively few transactions occur. answer TRUE question 2. A major control procedure related to plant and equipment is a budget for depreciation. answer FALSE question 3. Evidence of continued ownership of property is obtained by vouching payments to a […]

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audit chapter 12 quiz

question Which of the following is least likely to be among the auditors’ objectives in the audit of inventories and cost of goods sold? answer Establish that the client includes only inventory on hand at year-end in inventory totals. question The receiving department is least likely to be responsible for the: answer Preparation of a […]

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Chapter 5 Auditing

question 5.33 The most important fundamental component of an entity’s internal control is A. Effectiveness and efficiency of operations. B. People who operate the control system. C. Reliability of financial reporting. D. Compliance with applicable laws and regulations. answer question 5.34 The primary purpose for obtaining an understanding of a nonpublic audit client’s internal control […]

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Auditing Exam #1

question The audit objective that footnotes in the financial statements should be clear and expressed such that the information is easily conveyed to the readers of the financial statements is related most closely with which of the ASB presentation and disclosure assertions? answer Understandability question The accounting, auditing, and investigating agency of the U.S. Congress, […]

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audit final

60 days How many days after year end do large accelerated filers have to file with the SEC? (greater than $700 million market cap) 75 days How many days after year end do accelerated filers have to file with the SEC? (greater than $75 million, less than $700 million market cap) 90 days How many […]

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3. Of Meninges? & 5. Where Are

frontal and parietal lobesWhat lobes that the central sulcus separate? frontal lobe, parietal lobe, occipital lobe, and temporal lobeWhich structures are located in the cerebral cortex? Hypothalamus– is the anteroinferior region of the diencephalon – is a section of the brain responsible for hormone production – part of the brain controls thirst, temperature and endocrine […]

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The primary auditory cortex

3. On what lobe of the brain is the primary auditory cortex located; 4. The subarachnoid space lies between what two layers of meninges; 5. Where are the vital centers for control of heart rate, respiration and blood pressure located? The primary auditory cortex – is located within the temporal lobe, where it receives and […]

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