Exam 7: Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts, Audit of the Payroll and Personnel Cycle, Audit of the Inventory and Warehousing Cycle

For retail and wholesale businesses, the most important inventory is:

Auditors should be aware that the life of certain fixed assets might be reduced due to various circumstances. What circumstances might give rise to a reduction in the useful life of a fixed asset?

Inherent risk is typically ________ for balance- related audit objectives as they relate to payroll.

During the audit of prepaid insurance, the auditor should keep in mind that the amount in insurance expense is based on:

A major issue in verifying the ending balance in property, plant and equipment is the possibility of legal encumbrances. Describe the procedures that auditors may perform to obtain evidence about existing legal encumbrances.

In rare cases, the auditor may believe it is necessary that a complete physical inventory of fixed assets be taken to make sure they actually exist. If an inventory is taken, the auditor normally:

Ordinarily, it is unnecessary to test the accuracy objective or the classification objective for fixed assets acquired in prior years.

Match each of the descriptions with the following terms -Forms submitted to tax authorities for the payment of withheld taxes and the employer's tax.

Which type of audit procedure (tests of controls, tests of transactions, tests of details, or analytical procedures) is most often sufficient for the audit of prepaid expenses?

Which of the following statements is correct regarding the auditor's responsibility with respect to the year- end inventory procedures of an audit client?

An imprest payroll account ordinarily carries a balance that is:

Auditors seldom expect to find misstatements when testing payroll transactions.

Match each of the descriptions with the following terms -Records including date of employment, personnel investigations, rates of pay, etc.

Match each of the descriptions with the following terms -A form used to authorize the amount of pay.

Qatar Tooling Company mass produces eight different products. The controller who is interested in strengthening internal controls over the accounting for materials used in production would be most likely to implement a(n):

Discuss the advantages of using an imprest payroll account.

Match each of the descriptions with the following terms -A file used for recording payroll transactions for each employee and maintaining total employee wages paid for the year to date.

Debits to manufacturing equipment arise from which cycle(s)?

Which of the following is not an aspect of concern when auditing the cost accounting system?

Paychecks should be distributed by someone: