Exam 16: Audit of transaction cycles and financial statement balances II

The failure to capitalise a permanent asset, or the recording of an asset acquisition at the improper amount, affects the income statement:

Which of the following is NOT a 'cash equivalent'?

Which of the following is a balance-related audit objective for owners' equity?

The audit objectives for tests of cash balances are completeness, accuracy, and cutoff.

While analytical procedures are commonly used when auditing prepaid expenses and deferred charges, they are rarely sufficient in themselves.

Proof of cash is prepared in the audit when the client has a significant deficiency in internal control in cash.

Analytical procedures are essential for borrowings because:

The cash balance is immaterial in many audits, but cash transactions affecting the balance are almost always extremely material.

Listing all bank transfers made a few days before and after the balance sheet date and tracing each to the accounting records for proper recording is a useful approach to test for:

Which of the following types of owners' equity transactions would NOT require authorisation by the board of directors?

Discuss the four characteristics of the capital acquisition and repayment cycle that make it unique from other cycles.

The realisable value balance-related audit objective is not applicable when auditing loans payable.

Which of the following cycles does NOT affect cash in bank?

The three most important balance-related audit objectives for loans payable are existence, realisable value, and accuracy.

Which one of the following is NOT a characteristic of the capital acquisition and repayment cycle?

Which of the following misstatements will NOT normally be discovered as part of the audit of the bank reconciliation?

The bank reconciliation should be completed by someone with primary responsibility for cash receipts and payments.

The audit procedure 'foot the schedule of fixed assets acquisitions and trace the total to the general ledger' relates most closely to the accuracy objective for fixed assets acquisitions.

State the specific balance-related audit objectives applicable to loans payable and interest, and, for each objective, identify one common test of details of balances.

The periodic payments of interest and principal are normally tested as a part of the: