Question 1

An audit team would most likely examine the detail support for which of the following charges?

Accepted Answer

A) Payroll expense 
B) Cost of goods sold 
C) Supplies expense 
D) Legal expense. 
A) Payroll expense 
B) Cost of goods sold 
C) Supplies expense 
D) Legal expense.

Question 2

Vendor invoices should be compared to _______ and _______ to determine that the vendor is charging the approved price and for quantity received.

Accepted Answer

[purchase

Question 3

Small Corporation uses a Wages Clearing Account for its payroll disbursements. At the end of February, a reasonably large debit balance remained in this account. The most likely reason for this is that

Accepted Answer

A) more labor cost had been assigned to the expense accounts than had been paid. 
B) some labor cost had not been properly classified in the expense accounts. 
C) some employees had not yet cashed their checks. 
D) not enough cash had been transferred to the bank account. 
A) more labor cost had been assigned to the expense accounts than had been paid. 
B) some labor cost had not been properly classified in the expense accounts. 
C) some employees had not yet cashed their checks. 
D) not enough cash had been transferred to the bank account.

Question 4

Which of the following departments most likely would approve changes in pay rates and deductions from employee salaries?

Accepted Answer

A) Personnel 
B) Treasurer 
C) Controller 
D) Payroll 
A) Personnel 
B) Treasurer 
C) Controller 
D) Payroll

Question 5

An auditor wishes to perform tests of controls on a client's purchasing procedures. If the control activities leave no audit trail of documentary evidence, the auditor most likely will test the procedures by

Accepted Answer

A) confirmation and observation. 
B) observation and inquiry. 
C) analytical procedures and confirmation. 
D) inquiry and analytical procedures. 
A) confirmation and observation. 
B) observation and inquiry. 
C) analytical procedures and confirmation. 
D) inquiry and analytical procedures.

Question 6

Which of the following accounts does not appear in the acquisition and expenditure cycle?

Accepted Answer

A) Cash 
B) Purchases Returns 
C) Sales Returns 
D) Prepaid Insurance 
A) Cash 
B) Purchases Returns 
C) Sales Returns 
D) Prepaid Insurance

Question 7

_______ consist of (1) identification of data population for audit and (2) an expression of the action to be taken to produce relevant audit evidence.

Accepted Answer

The answer of _______ consist of (1) identification of data...

Question 8

An internal control questionnaire for payroll processing occurrence assertion would not include which of the following questions?

Accepted Answer

A) Are names of terminated employees reported in writing to the payroll department? 
B) Is the payroll compared to personnel files periodically? 
C) Are checks distributed by the employee's immediate supervisor? 
D) Are all wage rates determined by contract or approved by a personnel officer?. 
A) Are names of terminated employees reported in writing to the payroll department? 
B) Is the payroll compared to personnel files periodically? 
C) Are checks distributed by the employee's immediate supervisor? 
D) Are all wage rates determined by contract or approved by a personnel officer?.

Question 9

A personnel file should establish the reality of a person's _______ and _______.

Accepted Answer

[existence

Question 10

The auditor decided to test accounts payable by sending open-ended (blank) confirmations to selected vendors. The auditor's best approach in selecting the vendor accounts to confirm is to

Accepted Answer

A) select vendor accounts with large balances. 
B) select vendor accounts at random in order to apply a statistical sampling procedure. 
C) select vendor accounts based on the number of purchases from vendors during the year. 
D) select vendor accounts that are past due. 
A) select vendor accounts with large balances. 
B) select vendor accounts at random in order to apply a statistical sampling procedure. 
C) select vendor accounts based on the number of purchases from vendors during the year. 
D) select vendor accounts that are past due.

Question 11

"Recorded vouchers (accounts payable entries) in the voucher register (e.g., purchases journal) supported by completed voucher documentation" is a specific example of which management assertion?

Accepted Answer

A) Classification 
B) Occurrence 
C) Completeness 
D) Cutoff 
A) Classification 
B) Occurrence 
C) Completeness 
D) Cutoff

Question 12

Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?

Accepted Answer

A) Trace a sample of accounts payable entries recorded just before year-end to the unmatched receiving report file. 
B) Compare a sample of purchase orders issued just after year-end with the year-end accounts payable trial balance. 
C) Vouch a sample of cash disbursements recorded just after year-end to receiving reports and vendor invoices. 
D) Scan the cash disbursements entries recorded just before year-end for indications of unusual transactions. 
A) Trace a sample of accounts payable entries recorded just before year-end to the unmatched receiving report file. 
B) Compare a sample of purchase orders issued just after year-end with the year-end accounts payable trial balance. 
C) Vouch a sample of cash disbursements recorded just after year-end to receiving reports and vendor invoices. 
D) Scan the cash disbursements entries recorded just before year-end for indications of unusual transactions.

Question 13

Vouchers should be stamped PAID to

Accepted Answer

A) prevent duplicate payment. 
B) generate a new purchase order. 
C) indicate posting in the voucher register. 
D) facilitate preparation of the bank reconciliation. 
A) prevent duplicate payment. 
B) generate a new purchase order. 
C) indicate posting in the voucher register. 
D) facilitate preparation of the bank reconciliation.

Question 14

The _______ is the primary original record for payroll accounting.

Accepted Answer

The answer of The _______ is the primary original record...

Question 15

Which of the following is not a major control risk in the payroll cycle?

Accepted Answer

A) Paying fictitious "employees" 
B) Overpaying for time or production 
C) Losing employees to competitors. 
D) Incorrect accounting for costs or expenses 
A) Paying fictitious "employees" 
B) Overpaying for time or production 
C) Losing employees to competitors. 
D) Incorrect accounting for costs or expenses

Question 16

An auditor most likely would extend substantive tests of payroll when

Accepted Answer

A) payroll is extensively audited by the state government. 
B) payroll expense is substantially higher than in the prior year. 
C) overpayments are discovered in performing tests of controls. 
D) employees complain to management about too much overtime. 
A) payroll is extensively audited by the state government. 
B) payroll expense is substantially higher than in the prior year. 
C) overpayments are discovered in performing tests of controls. 
D) employees complain to management about too much overtime.

Question 17

A liability for a long-term purchase contract should generally be recognized when

Accepted Answer

A) the contract is signed. 
B) the goods are shipped. 
C) the goods are received. 
D) the goods are sold to match the cost. 
A) the contract is signed. 
B) the goods are shipped. 
C) the goods are received. 
D) the goods are sold to match the cost.

Question 18

Which of the following would not overstate current-period net income?

Accepted Answer

A) Capitalizing an expenditure that should be expensed 
B) Failing to record a liability for an expenditure 
C) Failing to record a check paying an item in vouchers payable. 
D) All of these would overstate net income 
A) Capitalizing an expenditure that should be expensed 
B) Failing to record a liability for an expenditure 
C) Failing to record a check paying an item in vouchers payable. 
D) All of these would overstate net income

Question 19

Computer controls that might be found in an advanced online acquisition and expenditure system would not include

Accepted Answer

A) all vendor invoices are prenumbered and the numbers accounted for. 
B) each terminal performs only designated functions. 
C) an identification number and password are required to enter the nonautomatic purchase orders. 
D) the check signature is printed using a signature plate that is installed on the computer printer only when checks are printed. 
A) all vendor invoices are prenumbered and the numbers accounted for. 
B) each terminal performs only designated functions. 
C) an identification number and password are required to enter the nonautomatic purchase orders. 
D) the check signature is printed using a signature plate that is installed on the computer printer only when checks are printed.

Question 20

When performing procedures in a search of unrecorded liabilities, auditors can utilize various sources of evidence/information (e.g., documents, files, management and clerical personnel).Required:List at least five, but not more than seven, sources of evidence/information for the search for unrecorded liabilities.(Do not write procedures. Do not take time to write about particular evidence that can be obtained or reasons for using the sources.)

Accepted Answer

Inquiry of client personnel, open purcha

An audit team would most likely examine the detail support for which of the following charges?

Vendor invoices should be compared to _ and _ to determine that the vendor is charging the approved price and for quantity received.

Small Corporation uses a Wages Clearing Account for its payroll disbursements. At the end of February, a reasonably large debit balance remained in this account. The most likely reason for this is that

Which of the following departments most likely would approve changes in pay rates and deductions from employee salaries?

An auditor wishes to perform tests of controls on a client's purchasing procedures. If the control activities leave no audit trail of documentary evidence, the auditor most likely will test the procedures by

Which of the following accounts does not appear in the acquisition and expenditure cycle?

_______ consist of (1) identification of data population for audit and (2) an expression of the action to be taken to produce relevant audit evidence.

An internal control questionnaire for payroll processing occurrence assertion would not include which of the following questions?

A personnel file should establish the reality of a person's _ and _.

The auditor decided to test accounts payable by sending open-ended (blank) confirmations to selected vendors. The auditor's best approach in selecting the vendor accounts to confirm is to

"Recorded vouchers (accounts payable entries) in the voucher register (e.g., purchases journal) supported by completed voucher documentation" is a specific example of which management assertion?

Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?

Vouchers should be stamped PAID to

The _______ is the primary original record for payroll accounting.

Which of the following is not a major control risk in the payroll cycle?

An auditor most likely would extend substantive tests of payroll when

A liability for a long-term purchase contract should generally be recognized when

Which of the following would not overstate current-period net income?

Computer controls that might be found in an advanced online acquisition and expenditure system would not include

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash 227

Revenue and Collection Cycle 279

Production Cycle 394

Finance and Investment Cycle 443

Completing the Audit 500

Reports on Audited Financial Statements

Filters

Exam 8: Acquisition and Expenditure Cycle 336

An audit team would most likely examine the detail support for which of the following charges?

Vendor invoices should be compared to _______ and _______ to determine that the vendor is charging the approved price and for quantity received.

Small Corporation uses a Wages Clearing Account for its payroll disbursements. At the end of February, a reasonably large debit balance remained in this account. The most likely reason for this is that

Which of the following departments most likely would approve changes in pay rates and deductions from employee salaries?

An auditor wishes to perform tests of controls on a client's purchasing procedures. If the control activities leave no audit trail of documentary evidence, the auditor most likely will test the procedures by

Which of the following accounts does not appear in the acquisition and expenditure cycle?

_______ consist of (1) identification of data population for audit and (2) an expression of the action to be taken to produce relevant audit evidence.

An internal control questionnaire for payroll processing occurrence assertion would not include which of the following questions?

A personnel file should establish the reality of a person's _______ and _______.

The auditor decided to test accounts payable by sending open-ended (blank) confirmations to selected vendors. The auditor's best approach in selecting the vendor accounts to confirm is to

"Recorded vouchers (accounts payable entries) in the voucher register (e.g., purchases journal) supported by completed voucher documentation" is a specific example of which management assertion?

Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?

Vouchers should be stamped PAID to

The _______ is the primary original record for payroll accounting.

Which of the following is not a major control risk in the payroll cycle?

An auditor most likely would extend substantive tests of payroll when

A liability for a long-term purchase contract should generally be recognized when

Which of the following would not overstate current-period net income?

Computer controls that might be found in an advanced online acquisition and expenditure system would not include

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash 227

Revenue and Collection Cycle 279

Production Cycle 394

Finance and Investment Cycle 443

Completing the Audit 500

Reports on Audited Financial Statements

Filters

Vendor invoices should be compared to _ and _ to determine that the vendor is charging the approved price and for quantity received.

A personnel file should establish the reality of a person's _ and _.