Question 1

The internal control that requires receiving reports to be prenumbered and accounted for satisfies the objective of

Accepted Answer

A)  occurrence. 
B)  classification. 
C)  completeness. 
D)  accuracy. 
A)  occurrence. 
B)  classification. 
C)  completeness. 
D)  accuracy.

Question 2

Describe the three types of tests that need to be performed by the auditor when auditing a client's data conversion process.

Accepted Answer

The three types of tests are:
•Compariso

Question 3

State each of the six specific balance-related audit objectives for manufacturing equipment additions and describe one common test of details of balances for each objective.

Accepted Answer

1. Current-year acquisitions as listed e

Question 4

State six specific balance-related audit objectives for accounts payable and for each objective describe one common test of details of balances.

Accepted Answer

Five specific balance-related audit obje

Question 5

Discuss the key internal controls related to the disposal of manufacturing equipment.

Accepted Answer

The most important internal control over

Question 6

A) Describe each of the five business functions that comprise the acquisition and payment cycle.
B) Describe the key documents used in processing purchase orders for the acquisitions and payment cycle.
C) Discuss the key documents and records used in recognizing the liability function in the acquisitions and payment cycle.

Accepted Answer

A)The five business functions that compr

Question 7

In determining that the accounts payable cutoff is correct, it is essential that the cutoff tests be coordinated with the

Accepted Answer

A)  confirmation of accounts payable. 
B)  tests on long-term liabilities. 
C)  observation of inventory. 
D)  cash count. 
A)  confirmation of accounts payable. 
B)  tests on long-term liabilities. 
C)  observation of inventory. 
D)  cash count.

Question 8

The test of transactions that requires the recomputing of cash discounts satisfies the objective of

Accepted Answer

A)  occurrence. 
B)  completeness. 
C)  accuracy. 
D)  posting and summarization. 
A)  occurrence. 
B)  completeness. 
C)  accuracy. 
D)  posting and summarization.

Question 9

Because of the importance of tests of controls for acquisitions and cash disbursements, it is common in this audit area to use

Accepted Answer

A)  attributes sampling. 
B)  variables sampling. 
C)  probability-proportional-to-size sampling. 
D)  block sampling. 
A)  attributes sampling. 
B)  variables sampling. 
C)  probability-proportional-to-size sampling. 
D)  block sampling.

Question 10

State each of the five specific transaction-related audit objectives for acquisitions and, for each objective, describe one common test of transactions.

Accepted Answer

The five specific transaction-related au

Question 11

When accounts payable and purchasing systems are highly automated, more detail is included in the transaction files. This deeper level of detail is illustrated by including

Accepted Answer

A)  economic order quantities for each item that is held in inventory, including delivery times. 
B)  quantities, prices, and item descriptions from each line of the supplier invoice. 
C)  sequentially numbered purchase requisitions and purchase orders (with matching numbers). 
D)  having receiving report numbers match the numbers on the supplier invoices for improved tracking. 
A)  economic order quantities for each item that is held in inventory, including delivery times. 
B)  quantities, prices, and item descriptions from each line of the supplier invoice. 
C)  sequentially numbered purchase requisitions and purchase orders (with matching numbers). 
D)  having receiving report numbers match the numbers on the supplier invoices for improved tracking.

Question 12

The purpose of the audit procedure to "examine underlying documentation for subsequent cash disbursements" is to

Accepted Answer

A)  uncover liabilities on the balance sheet that should not have been recorded until a subsequent period. 
B)  find the documentation relating to a cash disbursement. 
C)  uncover payments made in a subsequent accounting period that represent liabilities at the balance sheet date. 
D)  uncover cash disbursements recorded in a subsequent accounting period that should be recorded in that period. 
A)  uncover liabilities on the balance sheet that should not have been recorded until a subsequent period. 
B)  find the documentation relating to a cash disbursement. 
C)  uncover payments made in a subsequent accounting period that represent liabilities at the balance sheet date. 
D)  uncover cash disbursements recorded in a subsequent accounting period that should be recorded in that period.

Question 13

When automatic purchase orders are generated, to help make sure that goods are ordered for products that the company still needs, the company should

Accepted Answer

A)  have all purchase orders approved by the purchasing manager. 
B)  have suppliers automatically replenish the shelves. 
C)  ensure that re-order points are monitored. 
D)  have receiving reports matched to the purchase order amounts. 
A)  have all purchase orders approved by the purchasing manager. 
B)  have suppliers automatically replenish the shelves. 
C)  ensure that re-order points are monitored. 
D)  have receiving reports matched to the purchase order amounts.

Question 14

Discuss the audit tests the auditor would use to audit capital assets acquired in prior years.

Accepted Answer

The auditor would normally only check th

Question 15

The test of details of balances procedure to "inspect the accounts payable trial balance and master file for related parties, notes, or other interest-bearing liabilities" satisfies the objective of

Accepted Answer

A)  existence. 
B)  completeness. 
C)  classification. 
D)  detail tie-in. 
A)  existence. 
B)  completeness. 
C)  classification. 
D)  detail tie-in.

Question 16

Auditor confirmation of accounts payable balances at the balance sheet date may be unnecessary because

Accepted Answer

A)  this is a duplication of cutoff tests. 
B)  accounts payable balances at the balance sheet date may not be paid before the audit is completed. 
C)  correspondence with the audit client's lawyer will reveal all legal action by vendors for nonpayment. 
D)  there is likely to be other reliable external evidence available to support the balances. 
A)  this is a duplication of cutoff tests. 
B)  accounts payable balances at the balance sheet date may not be paid before the audit is completed. 
C)  correspondence with the audit client's lawyer will reveal all legal action by vendors for nonpayment. 
D)  there is likely to be other reliable external evidence available to support the balances.

Question 17

When verifying current-year additions to manufacturing equipment, the two major objectives for this part of the audit are

Accepted Answer

A)  accuracy and classification. 
B)  detail tie-in and cutoff. 
C)  disclosure and completeness. 
D)  rights and existence. 
A)  accuracy and classification. 
B)  detail tie-in and cutoff. 
C)  disclosure and completeness. 
D)  rights and existence.

Question 18

The proper recognition of accounts payable liabilities are crucial to ensure fair statement of the ending accounts payable balance. What documents are required to adequately support accounts payable?

Accepted Answer

A)  receiving reports and bill of lading documents that indicate dates shipped 
B)  bill of lading documents matched to the internal purchase requisition 
C)  purchase requisition (authorized) matched with the purchase order to the supplier 
D)  supplier invoices matched to receiving reports and authorized purchase documents 
A)  receiving reports and bill of lading documents that indicate dates shipped 
B)  bill of lading documents matched to the internal purchase requisition 
C)  purchase requisition (authorized) matched with the purchase order to the supplier 
D)  supplier invoices matched to receiving reports and authorized purchase documents

Question 19

The most important objectives for amortization expense are valuation and

Accepted Answer

A)  accuracy. 
B)  classification. 
C)  cutoff. 
D)  understandability. 
A)  accuracy. 
B)  classification. 
C)  cutoff. 
D)  understandability.

Question 20

The point at which most companies first recognize the acquisition and related liability on their records is when the

Accepted Answer

A)  purchase requisition is completed. 
B)  purchase order is completed. 
C)  receiving report is completed. 
D)  vendor's invoice is paid. 
A)  purchase requisition is completed. 
B)  purchase order is completed. 
C)  receiving report is completed. 
D)  vendor's invoice is paid.

The internal control that requires receiving reports to be prenumbered and accounted for satisfies the objective of

Describe the three types of tests that need to be performed by the auditor when auditing a client's data conversion process.

State each of the six specific balance-related audit objectives for manufacturing equipment additions and describe one common test of details of balances for each objective.

State six specific balance-related audit objectives for accounts payable and for each objective describe one common test of details of balances.

Discuss the key internal controls related to the disposal of manufacturing equipment.

In determining that the accounts payable cutoff is correct, it is essential that the cutoff tests be coordinated with the

The test of transactions that requires the recomputing of cash discounts satisfies the objective of

Because of the importance of tests of controls for acquisitions and cash disbursements, it is common in this audit area to use

State each of the five specific transaction-related audit objectives for acquisitions and, for each objective, describe one common test of transactions.

When accounts payable and purchasing systems are highly automated, more detail is included in the transaction files. This deeper level of detail is illustrated by including

The purpose of the audit procedure to "examine underlying documentation for subsequent cash disbursements" is to

When automatic purchase orders are generated, to help make sure that goods are ordered for products that the company still needs, the company should

Discuss the audit tests the auditor would use to audit capital assets acquired in prior years.

The test of details of balances procedure to "inspect the accounts payable trial balance and master file for related parties, notes, or other interest-bearing liabilities" satisfies the objective of

Auditor confirmation of accounts payable balances at the balance sheet date may be unnecessary because

When verifying current-year additions to manufacturing equipment, the two major objectives for this part of the audit are

The proper recognition of accounts payable liabilities are crucial to ensure fair statement of the ending accounts payable balance. What documents are required to adequately support accounts payable?

The most important objectives for amortization expense are valuation and

The point at which most companies first recognize the acquisition and related liability on their records is when the

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Legal Liability

Professional Judgment and Ethics

Audit Responsibilities and Objectives

Client Acceptance and Planning the Audit

Materiality and Risk

Internal Controls and Control Risk

Audit Evidence

Audit Strategy and Audit Program

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters

Exam 13: Audit of the Acquisition and Payment Cycle

The internal control that requires receiving reports to be prenumbered and accounted for satisfies the objective of

Describe the three types of tests that need to be performed by the auditor when auditing a client's data conversion process.

State each of the six specific balance-related audit objectives for manufacturing equipment additions and describe one common test of details of balances for each objective.

State six specific balance-related audit objectives for accounts payable and for each objective describe one common test of details of balances.

Discuss the key internal controls related to the disposal of manufacturing equipment.

In determining that the accounts payable cutoff is correct, it is essential that the cutoff tests be coordinated with the

The test of transactions that requires the recomputing of cash discounts satisfies the objective of

Because of the importance of tests of controls for acquisitions and cash disbursements, it is common in this audit area to use

State each of the five specific transaction-related audit objectives for acquisitions and, for each objective, describe one common test of transactions.

When accounts payable and purchasing systems are highly automated, more detail is included in the transaction files. This deeper level of detail is illustrated by including

The purpose of the audit procedure to "examine underlying documentation for subsequent cash disbursements" is to

When automatic purchase orders are generated, to help make sure that goods are ordered for products that the company still needs, the company should

Discuss the audit tests the auditor would use to audit capital assets acquired in prior years.

The test of details of balances procedure to "inspect the accounts payable trial balance and master file for related parties, notes, or other interest-bearing liabilities" satisfies the objective of

Auditor confirmation of accounts payable balances at the balance sheet date may be unnecessary because

When verifying current-year additions to manufacturing equipment, the two major objectives for this part of the audit are

The proper recognition of accounts payable liabilities are crucial to ensure fair statement of the ending accounts payable balance. What documents are required to adequately support accounts payable?

The most important objectives for amortization expense are valuation and

The point at which most companies first recognize the acquisition and related liability on their records is when the

The Demand for Audit and Other Assurance Services

The Public Accounting Profession and Audit Quality

Legal Liability

Professional Judgment and Ethics

Audit Responsibilities and Objectives

Client Acceptance and Planning the Audit

Materiality and Risk

Internal Controls and Control Risk

Audit Evidence

Audit Strategy and Audit Program

Audit Sampling Concepts

Audit of the Revenue Cycle

Audit of the Inventory and Distribution Cycle

Audit of the Human Resources and Payroll Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Audit Reports on Financial Statements

Other Assurance and Nonassurance Services

Filters