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

The tests of details of balances procedure which requires the auditor to review transactions near the balance sheet date for the proper period satisfies which audit objective?

To prevent the payment of a larger amount of dividends than was authorised, the corporation should use:

General ledger accounts commonly used in PPE are:

Because cash is the most desirable asset for people to steal, it has a higher:

In the audit of property, plant, and equipment, it is helpful to separate the tests into all of the following categories EXCEPT:

In the audit of loans payable, it is common to include tests of principal and interest payments as a part of the audit of the acquisitions and payment cycle, because the payments are in the cash payments journal that is being sampled.It is also normal to test these transactions as part of the capital acquisitions and repayment cycle, because:

The audit procedure 'examine loans paid after year-end to determine whether they were liabilities at the balance sheet date' is performed when verifying the completeness objective for loans payable.

The starting point for the verification of current-year acquisitions of property, plant, and equipment is normally a client-prepared schedule of all acquisitions recorded in the general ledger during the year.

If the client fails to record disposals of property, plant, and equipment, both the original cost of the asset account and the net book value will be incorrect.

The emphasis in auditing property, plant, and equipment is on the verification of:

Improper payments of officers' personal expenditures are a type of misstatement in cash that will normally be discovered as part of the audit of the bank reconciliation.

Which of the following concerns in auditing issued and paid-up capital involves tests of balances?

State the four most important audit objectives for share capital and describe how the auditor typically verifies each of the four objectives.

Cash account is primarily affected by which transactions in the sales and collection cycle?

The auditor's starting point for verifying disposals of property, plant, and equipment is the:

The audit of dividends transactions is typically performed using attributes sampling.

State each of the seven specific balance-related audit objectives for property, plant, and equipment additions, and, for each objective, describe one common test of details of balances.

The primary documents used to test the existence of current year acquisitions of property, plant, and equipment are vendors' invoices and receiving reports.

The primary accounting record for manufacturing equipment and other property, plant, and equipment accounts is generally an asset register.

A major consideration in verifying the ending balance in permanent assets is the possibility of existing legal encumbrances.Tests to identify possible legal encumbrances would satisfy which audit objective?