Question 1

Which of the following balance- related objectives is NOT a problem when auditing the general cash account?

Accepted Answer

A)  Cutoff 
B)  Accuracy 
C)  Rights 
D)  Completion 
A)  Cutoff 
B)  Accuracy 
C)  Rights 
D)  Completion C

Question 2

Cash account is primarily affected by which transactions in the payroll and personnel cycle?

Accepted Answer

A)  Sales 
B)  Collections 
C)  Both A and B 
D)  None of the above 
A)  Sales 
B)  Collections 
C)  Both A and B 
D)  None of the above D

Question 3

Examples of cash equivalents include time deposits, certificates of deposit and marketable securities.

Accepted Answer

A) True 
 B)False  False

Question 4

Identify three analytical procedures commonly performed for loans payable.

Accepted Answer

Some possible analytical procedures for

Question 5

The record of the issuance and transfer of shares for the life of the corporation is maintained in the:

Accepted Answer

A)  schedule of shareholders. 
B)  share register. 
C)  shareholders' master file. 
D)  corporate directory. 
A)  schedule of shareholders. 
B)  share register. 
C)  shareholders' master file. 
D)  corporate directory.

Question 6

The audit objective to determine that loans payable in the schedule exist is verified by the tests of balances procedure to:

Accepted Answer

A)  foot the loans payable list. 
B)  examine the balance sheet for proper disclosure of noncurrent portions. 
C)  examine duplicate copy of loans for authorisation. 
D)  recalculate interest expense. 
A)  foot the loans payable list. 
B)  examine the balance sheet for proper disclosure of noncurrent portions. 
C)  examine duplicate copy of loans for authorisation. 
D)  recalculate interest expense.

Question 7

Discuss two analytical procedures commonly performed during the audit of the cash account.

Accepted Answer

It is common for auditors to compare the

Question 8

Most companies are unlikely to have significant client business risks affecting cash balances.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following objective/s is usually the focus in auditing cash balances?

Accepted Answer

A)  Existence, completeness, accuracy and detail tie- in 
B)  Completeness, accuracy and detail tie- in 
C)  Existence and completeness 
D)  Existence, completeness and cutoff 
A)  Existence, completeness, accuracy and detail tie- in 
B)  Completeness, accuracy and detail tie- in 
C)  Existence and completeness 
D)  Existence, completeness and cutoff

Question 10

Client business risk relating to cash may arise from:

Accepted Answer

A)  handling of funds held in trust for others. 
B)  inappropriate cash management policies. 
C)  cash being more susceptible to theft than other types of investments. 
D)  all of the above 
A)  handling of funds held in trust for others. 
B)  inappropriate cash management policies. 
C)  cash being more susceptible to theft than other types of investments. 
D)  all of the above

Question 11

The starting point for the verification of current- year acquisitions of property, plant and equipment is normally a client- prepared schedule of all acquisitions recorded in the general ledger during the year.

Accepted Answer

A) True 
 B)False

Question 12

Tests for kiting are performed using a list of all bank transfers made within a few days of the balance date.

Accepted Answer

A) True 
 B)False

Question 13

Property, plant and equipment are assets that:

Accepted Answer

A)  have expected lives of more than one year. 
B)  are used in the business. 
C)  are not acquired for resale. 
D)  meet all of the requirements stated above. 
A)  have expected lives of more than one year. 
B)  are used in the business. 
C)  are not acquired for resale. 
D)  meet all of the requirements stated above.

Question 14

One unique characteristic of the capital acquisition and repayment cycle is that relatively few transactions affect the account balances, but each transaction is often highly material in amount.

Accepted Answer

A) True 
 B)False

Question 15

Discuss the four characteristics of the capital acquisition and repayment cycle that make it unique from other cycles.

Accepted Answer

The four characteristics are:
· Relative

Question 16

It is relatively easy to verify the client's reconciliation of the balance in the bank account to the general ledger.

Accepted Answer

A) True 
 B)False

Question 17

If the client fails to record disposals of property, plant and equipment, both the original cost of the asset account and the net book value will be incorrect.

Accepted Answer

A)  The original cost will be overstated indefinitely, and the net book value will be overstated until the asset is fully depreciated. 
B)  The original cost will be overstated indefinitely, and the net book value will be understated until the asset is fully depreciated. 
C)  Both will be overstated indefinitely. 
D)  The original cost will be overstated indefinitely, and the net book value will be understated indefinitely. 
A)  The original cost will be overstated indefinitely, and the net book value will be overstated until the asset is fully depreciated. 
B)  The original cost will be overstated indefinitely, and the net book value will be understated until the asset is fully depreciated. 
C)  Both will be overstated indefinitely. 
D)  The original cost will be overstated indefinitely, and the net book value will be understated indefinitely.

Question 18

The audit procedure 'Foot the loans payable list and trace the totals to the general ledger' is performed when verifying the accuracy objective for loans payable.

Accepted Answer

A) True 
 B)False

Question 19

Cash account is primarily affected by which transactions in the capital acquisition and repayment cycle?

Accepted Answer

A)  Issue of shares 
B)  Payment of dividends 
C)  Both A and B 
D)  None of the above 
A)  Issue of shares 
B)  Payment of dividends 
C)  Both A and B 
D)  None of the above

Question 20

The two most important audit procedures for prepayments are:

Accepted Answer

A)  tests of controls and substantive tests of transactions. 
B)  tests for reasonableness or plausible relationships using analytical procedures and recalculation. 
C)  consistency and accounting standards. 
D)  tests of controls and tests of details of balances. 
A)  tests of controls and substantive tests of transactions. 
B)  tests for reasonableness or plausible relationships using analytical procedures and recalculation. 
C)  consistency and accounting standards. 
D)  tests of controls and tests of details of balances.

Which of the following balance- related objectives is NOT a problem when auditing the general cash account?

Cash account is primarily affected by which transactions in the payroll and personnel cycle?

Examples of cash equivalents include time deposits, certificates of deposit and marketable securities.

Identify three analytical procedures commonly performed for loans payable.

The record of the issuance and transfer of shares for the life of the corporation is maintained in the:

The audit objective to determine that loans payable in the schedule exist is verified by the tests of balances procedure to:

Discuss two analytical procedures commonly performed during the audit of the cash account.

Most companies are unlikely to have significant client business risks affecting cash balances.

Which of the following objective/s is usually the focus in auditing cash balances?

Client business risk relating to cash may arise from:

The starting point for the verification of current- year acquisitions of property, plant and equipment is normally a client- prepared schedule of all acquisitions recorded in the general ledger during the year.

Tests for kiting are performed using a list of all bank transfers made within a few days of the balance date.

Property, plant and equipment are assets that:

One unique characteristic of the capital acquisition and repayment cycle is that relatively few transactions affect the account balances, but each transaction is often highly material in amount.

Discuss the four characteristics of the capital acquisition and repayment cycle that make it unique from other cycles.

It is relatively easy to verify the client's reconciliation of the balance in the bank account to the general ledger.

If the client fails to record disposals of property, plant and equipment, both the original cost of the asset account and the net book value will be incorrect.

The audit procedure 'Foot the loans payable list and trace the totals to the general ledger' is performed when verifying the accuracy objective for loans payable.

Cash account is primarily affected by which transactions in the capital acquisition and repayment cycle?

The two most important audit procedures for prepayments are:

Demand for Audit and Assurance Services

Auditors Legal Environment

Audit Quality and Ethics

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Documentation

Materiality and Risk

Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling

Audit of Transaction Cycles and Financial Statement Balances I

Completing the Audit

Audit Reporting

Other Auditing and Assurance Engagements

Filters

Exam 16: Audit of Transaction Cycles and Financial Statement Balances II

Which of the following balance- related objectives is NOT a problem when auditing the general cash account?

Cash account is primarily affected by which transactions in the payroll and personnel cycle?

Examples of cash equivalents include time deposits, certificates of deposit and marketable securities.

Identify three analytical procedures commonly performed for loans payable.

The record of the issuance and transfer of shares for the life of the corporation is maintained in the:

The audit objective to determine that loans payable in the schedule exist is verified by the tests of balances procedure to:

Discuss two analytical procedures commonly performed during the audit of the cash account.

Most companies are unlikely to have significant client business risks affecting cash balances.

Which of the following objective/s is usually the focus in auditing cash balances?

Client business risk relating to cash may arise from:

The starting point for the verification of current- year acquisitions of property, plant and equipment is normally a client- prepared schedule of all acquisitions recorded in the general ledger during the year.

Tests for kiting are performed using a list of all bank transfers made within a few days of the balance date.

Property, plant and equipment are assets that:

One unique characteristic of the capital acquisition and repayment cycle is that relatively few transactions affect the account balances, but each transaction is often highly material in amount.

Discuss the four characteristics of the capital acquisition and repayment cycle that make it unique from other cycles.

It is relatively easy to verify the client's reconciliation of the balance in the bank account to the general ledger.

If the client fails to record disposals of property, plant and equipment, both the original cost of the asset account and the net book value will be incorrect.

The audit procedure 'Foot the loans payable list and trace the totals to the general ledger' is performed when verifying the accuracy objective for loans payable.

Cash account is primarily affected by which transactions in the capital acquisition and repayment cycle?

The two most important audit procedures for prepayments are:

Demand for Audit and Assurance Services

Auditors Legal Environment

Audit Quality and Ethics

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Documentation

Materiality and Risk

Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling

Audit of Transaction Cycles and Financial Statement Balances I

Completing the Audit

Audit Reporting

Other Auditing and Assurance Engagements

Filters