Exam 9: Auditing the Revenue Cycle

A sample of positive confirmations is mailed for material accounts receivable balances. Frequently there is a lack of response. Which of the following is not an acceptable alternative procedure?

(Multiple Choice)

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Question 41

Which of the following is a formal document that conveys responsibility for shipped merchandise to the shipper?

(Multiple Choice)

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Question 42

In the audit of accounting estimates, such as the allowance for doubtful accounts, the auditor strives to provide reasonable assurance about which of the following?

(Multiple Choice)

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Question 43

Estimation of the allowance for doubtful accounts is a simple management decision as it is determined as a percentage of sales.

(True/False)

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Question 44

Requirements for confirming accounts receivable. Confirmation of accounts receivable is required under GAAS unless certain conditions exist. Identify the conditions that will be present in an audit that does not confirm accounts receivable.

(Essay)

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Question 45

To determine whether any accounts receivable are pledged or assigned to others, the auditor would most likely perform which of the following procedures?

(Multiple Choice)

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Question 46

Control over completeness for the revenue cycle. What control procedures should be implemented to ensure the completeness objective is met with respect to sales?

(Essay)

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Question 47

Sources of audit planning information may come from which of the following?

(Multiple Choice)

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Question 48

The auditor has determined that the control risk for the existence assertion is low; therefore the auditor may reduce the number of items tested on a substantive basis.

(True/False)

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Question 49

A consistent pattern of earnings growth would eliminate the auditor's concern for fraud in revenue recognition.

(True/False)

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Question 50

Which of the following audit procedures does not address the rights, presentation and disclosure assertion for pledged, discounted, assigned, and related-party accounts receivable?

(Multiple Choice)

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Question 51

An aging of accounts receivable is useful in estimating the reasonableness of the allowance for doubtful accounts.

(True/False)

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Question 52

An auditor would test control over the objective of the occurrence of sales transactions by sampling recorded revenues and tracing them back to invoices and shipping documents.

(True/False)

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Question 53

The revenue cycle considered by auditors includes the sales process but not collections.

(True/False)

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Question 54

What evidence is utilized by the auditor for analytical purposes in substantiating the completeness of the allowance for bad debt estimate?

(Multiple Choice)

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Question 55

Calculating the turnover of receivables is often used in testing the sales cycle by auditors when performing which of the following?

(Multiple Choice)

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Question 56

Use of reasonableness tests by Bono Mullins, PC will include relationships between financial but not non-financial datA.

(True/False)

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Question 57

The auditor of the revenue cycle of ABC Company computes an estimate of ABC's allowance for doubtful accounts and compares it to the estimate provided by ABC's management. The purpose for this procedure is to substantiate which assertion?

(Multiple Choice)

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Question 58

A method used by companies to fraudulently inflate revenues includes which of the following?

(Multiple Choice)

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Question 59

The intentional loading of sales at the end of a period to customers that do not need the goods at that time should not be recorded as revenues.

(True/False)

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Question 60

Showing 41 - 60 of 116

A sample of positive confirmations is mailed for material accounts receivable balances. Frequently there is a lack of response. Which of the following is not an acceptable alternative procedure?

Which of the following is a formal document that conveys responsibility for shipped merchandise to the shipper?

In the audit of accounting estimates, such as the allowance for doubtful accounts, the auditor strives to provide reasonable assurance about which of the following?

Estimation of the allowance for doubtful accounts is a simple management decision as it is determined as a percentage of sales.

Requirements for confirming accounts receivable. Confirmation of accounts receivable is required under GAAS unless certain conditions exist. Identify the conditions that will be present in an audit that does not confirm accounts receivable.

To determine whether any accounts receivable are pledged or assigned to others, the auditor would most likely perform which of the following procedures?

Control over completeness for the revenue cycle. What control procedures should be implemented to ensure the completeness objective is met with respect to sales?

Sources of audit planning information may come from which of the following?

The auditor has determined that the control risk for the existence assertion is low; therefore the auditor may reduce the number of items tested on a substantive basis.

A consistent pattern of earnings growth would eliminate the auditor's concern for fraud in revenue recognition.

Which of the following audit procedures does not address the rights, presentation and disclosure assertion for pledged, discounted, assigned, and related-party accounts receivable?

An aging of accounts receivable is useful in estimating the reasonableness of the allowance for doubtful accounts.

An auditor would test control over the objective of the occurrence of sales transactions by sampling recorded revenues and tracing them back to invoices and shipping documents.

The revenue cycle considered by auditors includes the sales process but not collections.

What evidence is utilized by the auditor for analytical purposes in substantiating the completeness of the allowance for bad debt estimate?

Calculating the turnover of receivables is often used in testing the sales cycle by auditors when performing which of the following?

Use of reasonableness tests by Bono Mullins, PC will include relationships between financial but not non-financial datA.

The auditor of the revenue cycle of ABC Company computes an estimate of ABC's allowance for doubtful accounts and compares it to the estimate provided by ABC's management. The purpose for this procedure is to substantiate which assertion?

A method used by companies to fraudulently inflate revenues includes which of the following?

The intentional loading of sales at the end of a period to customers that do not need the goods at that time should not be recorded as revenues.

Auditing: Integral to the Economy

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditors

Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

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