Question 1

An audit plan for accounts payable would not include which of the following procedures?

Accepted Answer

A) Obtaining a trial balance of recorded accounts payable 
B) Sending confirmation to accounts with zero balances 
C) Reviewing cash receipts for the period after year-end. 
D) Obtaining written client representations about related-party payables and pledges of assets as collateral for liabilities 
A) Obtaining a trial balance of recorded accounts payable 
B) Sending confirmation to accounts with zero balances 
C) Reviewing cash receipts for the period after year-end. 
D) Obtaining written client representations about related-party payables and pledges of assets as collateral for liabilities

Question 2

Which of the following would not typically be a specific relevant assertion about fixed asset accounts?

Accepted Answer

A) Fixed assets in the accounts exist and are in productive use. 
B) Net carrying book values in the accounts are reflected at current market values. 
C) Depreciation has been calculated properly using accepted methods and reasonable estimates of useful life and other factors. 
D) Fixed assets are properly classified in the balance sheet under appropriate descriptive captions. 
A) Fixed assets in the accounts exist and are in productive use. 
B) Net carrying book values in the accounts are reflected at current market values. 
C) Depreciation has been calculated properly using accepted methods and reasonable estimates of useful life and other factors. 
D) Fixed assets are properly classified in the balance sheet under appropriate descriptive captions.

Question 3

An auditor most likely would assess control risk at the maximum if the payroll department supervisor is responsible for

Accepted Answer

A) examining authorization forms for new employees. 
B) comparing payroll registers with original batch transmittal data. 
C) distribute payroll checks to all employees. 
D) hiring all subordinate payroll department employees. 
A) examining authorization forms for new employees. 
B) comparing payroll registers with original batch transmittal data. 
C) distribute payroll checks to all employees. 
D) hiring all subordinate payroll department employees.

Question 4

The five functional responsibilities of a payroll cycle are _______, _______, _______, and _______.

Accepted Answer

[personnel, supervis

Question 5

Which of the following accounts would most likely be reviewed by the auditor to gain reasonable assurance that additions to the equipment account are not understated?

Accepted Answer

A) Depreciation expense 
B) Gain on disposal of equipment 
C) Accounts payable 
D) Repairs and maintenance expense 
A) Depreciation expense 
B) Gain on disposal of equipment 
C) Accounts payable 
D) Repairs and maintenance expense

Question 6

A weakness in internal control over recording retirements of equipment may cause an auditor to

Accepted Answer

A) inspect certain items of equipment in the plant and trace those items to the accounting records. 
B) review the subsidiary ledger to ascertain whether depreciation was taken on each item of equipment during the year. 
C) trace additions to the "other assets" account to search for equipment that is still on hand but no longer being used. 
D) select certain items of equipment from the accounting records and locate them in the plant. 
A) inspect certain items of equipment in the plant and trace those items to the accounting records. 
B) review the subsidiary ledger to ascertain whether depreciation was taken on each item of equipment during the year. 
C) trace additions to the "other assets" account to search for equipment that is still on hand but no longer being used. 
D) select certain items of equipment from the accounting records and locate them in the plant.

Question 7

Tracing a sample of time clock cards to payroll registers (journals) is a procedure designed to obtain evidence about the transaction assertion(s) of

Accepted Answer

A) occurrence only. 
B) occurrence and accuracy only. 
C) completeness only. 
D) accuracy only. 
A) occurrence only. 
B) occurrence and accuracy only. 
C) completeness only. 
D) accuracy only.

Question 8

Specific balance assertions typical of accounts payable would not include

Accepted Answer

A) recorded liabilities are obligations of the entity. 
B) estimated liabilities are properly valued. 
C) accounts payable are not pledged as collateral. 
D) payables are recorded in the proper period. 
A) recorded liabilities are obligations of the entity. 
B) estimated liabilities are properly valued. 
C) accounts payable are not pledged as collateral. 
D) payables are recorded in the proper period.

Question 9

Which of the following audit procedures is best for identifying unrecorded accounts payable?

Accepted Answer

A) Reviewing cash disbursements recorded subsequent to the balance sheet date to determine whether the related payables apply to the prior period. 
B) Investigating payables recorded just prior to and just subsequent to the balance sheet date to determine whether they are supported by receiving reports 
C) Examining unusual relationships between monthly accounts payable balances and recorded cash payments 
D) Reconciling vendors' statements to the file of receiving reports to identify items received just prior to the balance sheet date 
A) Reviewing cash disbursements recorded subsequent to the balance sheet date to determine whether the related payables apply to the prior period. 
B) Investigating payables recorded just prior to and just subsequent to the balance sheet date to determine whether they are supported by receiving reports 
C) Examining unusual relationships between monthly accounts payable balances and recorded cash payments 
D) Reconciling vendors' statements to the file of receiving reports to identify items received just prior to the balance sheet date

Question 10

Julie works in accounts payable. Her job is to prepare the voucher package and submit the completed voucher to the treasurer's office for payment. When the voucher is paid by the Treasurer's department it is returned to Julie (without the check) for filing.The company receives invoices from Mona's Office Supply. When Julie receives the voucher package back from the Treasurer, Julie scans the invoice from Mona's Office Supply and changes the address so that a duplicate payment is sent to a Mail Boxes Etc. store where Julie rents a mail box under the name Mini's Official Supplies. With the slightly altered invoice (no other changes are made), Julie submits the voucher package a second time. Julie also has a bank account with the name Mini's Official Supplies. When Julie receives the check for Mona's Office Supply, Julie deposits it in her Mini's Official Supplies bank account and then used an ATM card to withdraw the cash.A) Define the internal control weakness that allowed the situation to exist - if any;B) One (and only one) specific internal controls that should be in place to prevent or detect the problem; andC) One (and only one) test of control audit procedure.D) One (and only one) substantive audit procedure that may detect the situation described. No credit will be given for generic controls (e.g. policies and procedures; separation of duties without specifics; discuss with management). Be specific

Accepted Answer

Students may give any of the followingWe

Question 11

Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?

Accepted Answer

A) Vouchers should be prepared by individuals who are responsible for signing disbursement checks. 
B) Disbursement vouchers should be approved by at least two responsible management officials. 
C) The date on a disbursement voucher should be within a few days of the date the voucher is presented for payment. 
D) The official who signs the check should compare the check with the voucher and should stamp PAID on the voucher documents. 
A) Vouchers should be prepared by individuals who are responsible for signing disbursement checks. 
B) Disbursement vouchers should be approved by at least two responsible management officials. 
C) The date on a disbursement voucher should be within a few days of the date the voucher is presented for payment. 
D) The official who signs the check should compare the check with the voucher and should stamp PAID on the voucher documents.

Question 12

Which of the following functional responsibilities would not typically relate to salaried employees?

Accepted Answer

A) Collecting timekeeping data. 
B) Supervision 
C) Personnel or labor relations 
D) Payroll distribution 
A) Collecting timekeeping data. 
B) Supervision 
C) Personnel or labor relations 
D) Payroll distribution

Question 13

Auditors ordinarily ascertain whether payroll checks are properly endorsed during the audit of

Accepted Answer

A) clock cards. 
B) the voucher system. 
C) cash in bank. 
D) accrued payroll. 
A) clock cards. 
B) the voucher system. 
C) cash in bank. 
D) accrued payroll.

Question 14

Which of the following would detect the understatement of a purchase discount?

Accepted Answer

A) Verify the arithmetic accuracy of the purchases journal 
B) Compare purchase disbursement records and checks with invoice terms 
C) Compare approved purchase orders to receiving reports 
D) Verify the receipt of items ordered and invoiced 
A) Verify the arithmetic accuracy of the purchases journal 
B) Compare purchase disbursement records and checks with invoice terms 
C) Compare approved purchase orders to receiving reports 
D) Verify the receipt of items ordered and invoiced

Question 15

Which of the following would be an indicator of potential fraud?

Accepted Answer

A) Photocopies of invoices in the voucher file 
B) Vendor invoices in numerical order 
C) Vendors with only post office box addresses 
D) All of these indicate potential fraud. 
A) Photocopies of invoices in the voucher file 
B) Vendor invoices in numerical order 
C) Vendors with only post office box addresses 
D) All of these indicate potential fraud.

Question 16

"All purchase orders are supported by requisitions from proper persons" is a specific example of which management assertion?

Accepted Answer

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

Question 17

For the copy of the purchase order that goes to the receiving department, it is best to

Accepted Answer

A) leave off the description of the goods ordered. 
B) leave off the quantity of the goods ordered. 
C) leave off the name of the vendor. 
D) have the receiving department forward all copies of the purchase order to accounts payable. 
A) leave off the description of the goods ordered. 
B) leave off the quantity of the goods ordered. 
C) leave off the name of the vendor. 
D) have the receiving department forward all copies of the purchase order to accounts payable.

Question 18

What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices?

Accepted Answer

A) Purchase requisitions and accounts payable entries 
B) Receiving reports and purchase orders 
C) Purchase requisitions and purchases orders 
D) Purchase orders and bid quotes 
A) Purchase requisitions and accounts payable entries 
B) Receiving reports and purchase orders 
C) Purchase requisitions and purchases orders 
D) Purchase orders and bid quotes

Question 19

A voucher package is used to

Accepted Answer

A) document receipt of inventory. 
B) document completion of services. 
C) document a purchase contract. 
D) provide a source document for recording the purchase of a good or service. 
A) document receipt of inventory. 
B) document completion of services. 
C) document a purchase contract. 
D) provide a source document for recording the purchase of a good or service.

Question 20

In performing a search for unrecorded retirements of fixed assets, an auditor most likely would

Accepted Answer

A) inspect the property ledger and the insurance and tax records, and then tour the client's facilities. 
B) tour the client's facilities, and then inspect the property ledger, and the insurance and tax records. 
C) analyze the repair and maintenance account, and then tour the client's facilities. 
D) tour the client's facilities, and then analyze the repair and maintenance account. 
A) inspect the property ledger and the insurance and tax records, and then tour the client's facilities. 
B) tour the client's facilities, and then inspect the property ledger, and the insurance and tax records. 
C) analyze the repair and maintenance account, and then tour the client's facilities. 
D) tour the client's facilities, and then analyze the repair and maintenance account.

An audit plan for accounts payable would not include which of the following procedures?

Which of the following would not typically be a specific relevant assertion about fixed asset accounts?

An auditor most likely would assess control risk at the maximum if the payroll department supervisor is responsible for

The five functional responsibilities of a payroll cycle are ___, _, _, and ___.

Which of the following accounts would most likely be reviewed by the auditor to gain reasonable assurance that additions to the equipment account are not understated?

A weakness in internal control over recording retirements of equipment may cause an auditor to

Tracing a sample of time clock cards to payroll registers (journals) is a procedure designed to obtain evidence about the transaction assertion(s) of

Specific balance assertions typical of accounts payable would not include

Which of the following audit procedures is best for identifying unrecorded accounts payable?

Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?

Which of the following functional responsibilities would not typically relate to salaried employees?

Auditors ordinarily ascertain whether payroll checks are properly endorsed during the audit of

Which of the following would detect the understatement of a purchase discount?

Which of the following would be an indicator of potential fraud?

"All purchase orders are supported by requisitions from proper persons" is a specific example of which management assertion?

For the copy of the purchase order that goes to the receiving department, it is best to

What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices?

A voucher package is used to

In performing a search for unrecorded retirements of fixed assets, an auditor most likely would

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 plan for accounts payable would not include which of the following procedures?

Which of the following would not typically be a specific relevant assertion about fixed asset accounts?

An auditor most likely would assess control risk at the maximum if the payroll department supervisor is responsible for

The five functional responsibilities of a payroll cycle are _______, _______, _______, and _______.

Which of the following accounts would most likely be reviewed by the auditor to gain reasonable assurance that additions to the equipment account are not understated?

A weakness in internal control over recording retirements of equipment may cause an auditor to

Tracing a sample of time clock cards to payroll registers (journals) is a procedure designed to obtain evidence about the transaction assertion(s) of

Specific balance assertions typical of accounts payable would not include

Which of the following audit procedures is best for identifying unrecorded accounts payable?

Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?

Which of the following functional responsibilities would not typically relate to salaried employees?

Auditors ordinarily ascertain whether payroll checks are properly endorsed during the audit of

Which of the following would detect the understatement of a purchase discount?

Which of the following would be an indicator of potential fraud?

"All purchase orders are supported by requisitions from proper persons" is a specific example of which management assertion?

For the copy of the purchase order that goes to the receiving department, it is best to

What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices?

A voucher package is used to

In performing a search for unrecorded retirements of fixed assets, an auditor most likely would

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

The five functional responsibilities of a payroll cycle are ___, _, _, and ___.