Exam 7: Revenue and Collection Cycle 279

Another way to obtain information about the internal control system is to take a single example of a transaction and _______ the process from its initiation to its recording in the accounting records.

In the audit of accounts receivable, the most important emphasis should be on the:

When an audit team traces a sample of shipping documents to the related sales invoice copies, they are trying to find relevant evidence that:

Alpha Brewery Corporation recorded sales through January 4, 2021, dating them December 31, 2020. This situation is an example of a violation of which of the following assertions?

In confirming a client's accounts receivable in prior years, an auditor discovered many differences between recorded account balances and confirmation replies. These differences were resolved and were not misstatements. In defining the sampling unit for the current year's audit, the auditor most likely would choose:

In tests of controls auditing, auditors need to define "deviations" in advance. Give seven examples of control compliance deviations related to a client's processing of credit sales transactions and the related assertion that was violated.

What procedures should an auditor perform for a positive confirmation that is not returned by the client's customer?

When a sample of customer accounts receivable is selected for vouching debits, auditors will vouch them to:

Accountants should be under orders to record sales and accounts receivable when:

In the revenue and collection cycle, the auditor checks the numerical sequence of shipping documents. This procedure is related to which of the following assertions?

You are the auditor for Wilson Wholesale Products Inc. As part of the audit of accounts receivable, Wilson has provided you an electronic file representing its accounts receivable as of its fiscal year-end. The file includes the customer name, customer address, customer number, sales invoice number, sales invoice date, and amount. Required:Describe three or more substantive audit procedures you might perform using computer-assisted audit tools and techniques (CAATs) with this computer file.

To conceal defalcations involving receivables, a dishonest bookkeeper might charge which of the following accounts?

Revenues are normally considered to have been earned when:

The negative request form of accounts receivable confirmation is useful particularly when the: Assessed Level of Risk of Number of Proper Consideratior Material Small by the Recipient Is Misstatement Relating to Balances Is Receivables Is A. Low Many Likely B. Low Few Unlikely C. High Few Likely D. High Many Likely

Which of the following questions included in an internal control questionnaire would evaluate the valuation objective of revenues?

Is the confirmation of cash and accounts receivable required according to auditing standards? Explain.

The file that contains sales transactions that were initiated in the system but are not yet completed is the:

The assertion that auditors will probably emphasize in the revenue and collection cycle is:

Write-offs of doubtful accounts should be approved by:

When an audit team does not receive a response on a positive accounts receivable confirmation, auditors should do all of the following except: