Question 1

The starting point for the verification of current year acquisitions of property, plant and equipment is normally:

Accepted Answer

A)  the acquisitions journal. 
B)  the purchase requisitions file. 
C)  a schedule obtained from the client of all acquisitions recorded in the general ledger during the year. 
D)  the property, plant and equipment account in the general ledger. 
A)  the acquisitions journal. 
B)  the purchase requisitions file. 
C)  a schedule obtained from the client of all acquisitions recorded in the general ledger during the year. 
D)  the property, plant and equipment account in the general ledger.

Question 2

When auditing owners' equity, the realisable value objective is not applicable.

Accepted Answer

A) True 
 B)False

Question 3

The balance- related audit objective to determine that cash in bank is properly presented and disclosed can be met through which of the following tests of details of balances?

Accepted Answer

A)  Foot the outstanding cheque list and deposits in transit 
B)  Test for kiting 
C)  Examine minutes, loan agreements and the bank confirmation for restrictions on the use of cash and compensating balances 
D)  Trace outstanding cheques to subsequent period bank statement 
A)  Foot the outstanding cheque list and deposits in transit 
B)  Test for kiting 
C)  Examine minutes, loan agreements and the bank confirmation for restrictions on the use of cash and compensating balances 
D)  Trace outstanding cheques to subsequent period bank statement

Question 4

Explain the purpose of testing the client's bank reconciliation and discuss the major audit procedures involved.

Accepted Answer

The purpose of testing the client's reco

Question 5

The auditor's physical examination of property, plant and equipment is commonly used when verifying the existence objective for acquisitions of property, plant and equipment.

Accepted Answer

A) True 
 B)False

Question 6

The primary accounting record for manufacturing equipment and other property, plant and equipment accounts is generally an asset register.

Accepted Answer

A) True 
 B)False

Question 7

Discuss how analytical review can be a useful audit technique in the audit of cash balances.

Accepted Answer

Misstatements in cash balances can be de

Question 8

When auditing owners' equity, the rights and obligations objective is not applicable.

Accepted Answer

A) True 
 B)False

Question 9

The tests of details of balances procedure which requires the auditor to review transactions near the balance sheet date for the proper period satisfies the audit objective of:

Accepted Answer

A)  existence. 
B)  cutoff. 
C)  classification. 
D)  completeness. 
A)  existence. 
B)  cutoff. 
C)  classification. 
D)  completeness.

Question 10

Recording of an acquisition of a fixed asset at an improper amount affects the balance sheet until the company disposes of the asset, but the income statement is not affected.

Accepted Answer

A) True 
 B)False

Question 11

The accuracy objective for share transactions is ordinarily tested by confirming the amount with the share transfer agent.

Accepted Answer

A) True 
 B)False

Question 12

The auditor must know the client's capitalisation policies to determine whether acquisitions are:

Accepted Answer

A)  treated in accordance with accounting standards. 
B)  treated consistently with those of the preceding year. 
C)  both A and B 
D)  none of the above 
A)  treated in accordance with accounting standards. 
B)  treated consistently with those of the preceding year. 
C)  both A and B 
D)  none of the above

Question 13

State each of the seven specific balance- related audit objectives for property, plant and equipment additions and, for each objective, describe one common test of details of balances.

Accepted Answer

· Current- year acquisitions in the acqu

Question 14

One typical difference between the asset prepaid expenses and other assets, such as accounts receivable and inventory, is the immateriality of the former in many audits. Because of this immateriality, frequently the only audit procedure necessary to perform is:

Accepted Answer

A)  analytical procedures. 
B)  tests of transactions. 
C)  tests of control. 
D)  tests of details of balances. 
A)  analytical procedures. 
B)  tests of transactions. 
C)  tests of control. 
D)  tests of details of balances.

Question 15

Which one of the general tests of details of balance objectives is NOT important in the audit of borrowings?

Accepted Answer

A)  Realisable value 
B)  Completeness 
C)  Existence 
D)  Valuation 
A)  Realisable value 
B)  Completeness 
C)  Existence 
D)  Valuation

Question 16

The general cash account is considered significant in almost all audits:

Accepted Answer

A)  where either the beginning or ending balance is material. 
B)  even when the ending balance is immaterial. 
C)  except those of not- for- profit organisations. 
D)  where the ending balance is material. 
A)  where either the beginning or ending balance is material. 
B)  even when the ending balance is immaterial. 
C)  except those of not- for- profit organisations. 
D)  where the ending balance is material.

Question 17

Improper payments of officers' personal expenditures is a type of misstatement in cash that will normally be discovered as part of the audit of the bank reconciliation.

Accepted Answer

A) True 
 B)False

The starting point for the verification of current year acquisitions of property, plant and equipment is normally:

When auditing owners' equity, the realisable value objective is not applicable.

The balance- related audit objective to determine that cash in bank is properly presented and disclosed can be met through which of the following tests of details of balances?

Explain the purpose of testing the client's bank reconciliation and discuss the major audit procedures involved.

The auditor's physical examination of property, plant and equipment is commonly used when verifying the existence objective for acquisitions of property, plant and equipment.

The primary accounting record for manufacturing equipment and other property, plant and equipment accounts is generally an asset register.

Discuss how analytical review can be a useful audit technique in the audit of cash balances.

When auditing owners' equity, the rights and obligations objective is not applicable.

The tests of details of balances procedure which requires the auditor to review transactions near the balance sheet date for the proper period satisfies the audit objective of:

Recording of an acquisition of a fixed asset at an improper amount affects the balance sheet until the company disposes of the asset, but the income statement is not affected.

The accuracy objective for share transactions is ordinarily tested by confirming the amount with the share transfer agent.

The auditor must know the client's capitalisation policies to determine whether acquisitions are:

State each of the seven specific balance- related audit objectives for property, plant and equipment additions and, for each objective, describe one common test of details of balances.

One typical difference between the asset prepaid expenses and other assets, such as accounts receivable and inventory, is the immateriality of the former in many audits. Because of this immateriality, frequently the only audit procedure necessary to perform is:

Which one of the general tests of details of balance objectives is NOT important in the audit of borrowings?

The general cash account is considered significant in almost all audits:

Improper payments of officers' personal expenditures is a type of misstatement in cash that will normally be discovered as part of the audit of the bank reconciliation.

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

The starting point for the verification of current year acquisitions of property, plant and equipment is normally:

When auditing owners' equity, the realisable value objective is not applicable.

The balance- related audit objective to determine that cash in bank is properly presented and disclosed can be met through which of the following tests of details of balances?

Explain the purpose of testing the client's bank reconciliation and discuss the major audit procedures involved.

The auditor's physical examination of property, plant and equipment is commonly used when verifying the existence objective for acquisitions of property, plant and equipment.

The primary accounting record for manufacturing equipment and other property, plant and equipment accounts is generally an asset register.

Discuss how analytical review can be a useful audit technique in the audit of cash balances.

When auditing owners' equity, the rights and obligations objective is not applicable.

The tests of details of balances procedure which requires the auditor to review transactions near the balance sheet date for the proper period satisfies the audit objective of:

Recording of an acquisition of a fixed asset at an improper amount affects the balance sheet until the company disposes of the asset, but the income statement is not affected.

The accuracy objective for share transactions is ordinarily tested by confirming the amount with the share transfer agent.

The auditor must know the client's capitalisation policies to determine whether acquisitions are:

State each of the seven specific balance- related audit objectives for property, plant and equipment additions and, for each objective, describe one common test of details of balances.

One typical difference between the asset prepaid expenses and other assets, such as accounts receivable and inventory, is the immateriality of the former in many audits. Because of this immateriality, frequently the only audit procedure necessary to perform is:

Which one of the general tests of details of balance objectives is NOT important in the audit of borrowings?

The general cash account is considered significant in almost all audits:

Improper payments of officers' personal expenditures is a type of misstatement in cash that will normally be discovered as part of the audit of the bank reconciliation.

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