Exam 15: Audit of Transaction Cycles and Financial Statement Balances I

A file recording payroll transactions for each employee and maintaining total wages paid for year to date is:

A document identifying the description, supplier, quantity and related information for goods and services the company intends to purchase is the:

The most important consideration in evaluating the fairness of the amounts accrued for holiday pay, sick pay and other benefits is:

By tracing receiving reports issued at and before year- end to vendors' invoices and making sure they are included in accounts payable, the auditor is testing for:

Misstatements in payroll are rarely material.

Internal controls over the ship finished goods function in the inventory and warehousing cycle are normally tested by the auditor as a part of performing tests of controls and substantive tests of transactions in the sales and collection cycle.

The auditor must verify whether the physical counts were correctly summarised, the inventory quantities and prices were correctly extended and the extended inventory was correctly footed. These tests are called:

State five specific balance- related audit objectives for physical inventory observation and, for each objective, describe one common test of details of balances related to that objective.

The test of details of balance procedure which requires the auditor to inquire of management for the possibility of the inclusion of consigned or other non- owned inventory is associated with the audit objective of:

When auditing the payroll and personnel cycle, tests of controls are rarely performed.

The most common type/s of fraud by employees in the payroll area is/are:

To BEST ascertain that a company has properly included merchandise that it owns in its ending inventory, the auditor should review and test the:

The analytical procedure that requires the auditor to 'review the list of accounts payable for unusual or non- vendor payables' would have the best chance of discovering which possible error?

When examining payroll transactions, an auditor is primarily concerned with the possibility of:

The accounts payable department usually has responsibility for verifying the propriety of acquisitions by comparing the details on the:

A comparison of the current year's inventory turnover ratio with that of previous years may indicate the presence of obsolete inventory.

The most important part of the observation of inventory is determining whether:

Describe the audit procedures typically used to test for out- of- period liabilities (also referred to as the search for unrecorded accounts payable).