Question 1

Analytical procedures

Accepted Answer

A)  are only done during the planning of the audit and when performing detailed tests. 
B)  performed during the detailed testing phase are done before tests of details of balances. 
C)  performed during the detailed testing phase are done before the balance sheet date. 
D)  are performed only on accounts receivable, not on the entire sales and collection cycle. 
A)  are only done during the planning of the audit and when performing detailed tests. 
B)  performed during the detailed testing phase are done before tests of details of balances. 
C)  performed during the detailed testing phase are done before the balance sheet date. 
D)  are performed only on accounts receivable, not on the entire sales and collection cycle.

Question 2

Describe the differences between positive and negative confirmations. Which type is generally viewed as more reliable?

Accepted Answer

A positive confirmation is a letter, add

Question 3

Auditors use the results of the substantive tests of transactions of sales and the collection cycle to determine the extent to which inherent risk is satisfied for each accounts receivable balance-related audit objective.

Accepted Answer

A) True 
 B)False

Question 4

Cutoff misstatements occur

Accepted Answer

A)  either by error or fraud. 
B)  by error only. 
C)  by fraud only. 
D)  randomly without causes related to errors or fraud. 
A)  either by error or fraud. 
B)  by error only. 
C)  by fraud only. 
D)  randomly without causes related to errors or fraud.

Question 5

When positive confirmations are used, auditing standards require alternative procedures for confirmations not returned by the customer. Which of the following would not be considered an alternative procedure?

Accepted Answer

A)  Send a second confirmation request. 
B)  Examine subsequent cash receipts to determine if the receivable has been paid. 
C)  Examine shipping documents to verify that the merchandise was shipped. 
D)  Examine sales invoice to verify the actual issuance of a sales invoice and the actual date of the billing. 
A)  Send a second confirmation request. 
B)  Examine subsequent cash receipts to determine if the receivable has been paid. 
C)  Examine shipping documents to verify that the merchandise was shipped. 
D)  Examine sales invoice to verify the actual issuance of a sales invoice and the actual date of the billing.

Question 6

The criterion used by most merchandising and manufacturing clients for determining when revenue recognition takes place is whether title to the goods has passed.

Accepted Answer

A) True 
 B)False

Question 7

Discuss the audit procedures performed when testing the detail tie-in objective for accounts receivable, and explain why this objective is ordinarily tested before any other objectives for accounts receivable.

Accepted Answer

When testing the detail tie-in objective

Question 8

Audit procedures designed to uncover credit sales made after the client's fiscal year-end that relate to the current year being audited provide evidence for which of the following audit objectives?

Accepted Answer

A)  realizable value 
B)  accuracy 
C)  cutoff 
D)  existence 
A)  realizable value 
B)  accuracy 
C)  cutoff 
D)  existence

Question 9

It is common to use a combination of positive and negative confirmations by sending the latter to accounts with large balances and the former to those with small balances.

Accepted Answer

A) True 
 B)False

Question 10

Auditors must maintain control of confirmations until they are returned from the customer.

Accepted Answer

A) True 
 B)False

Question 11

Cutoff misstatements occur when

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Analytical procedures

Describe the differences between positive and negative confirmations. Which type is generally viewed as more reliable?

Auditors use the results of the substantive tests of transactions of sales and the collection cycle to determine the extent to which inherent risk is satisfied for each accounts receivable balance-related audit objective.

Cutoff misstatements occur

When positive confirmations are used, auditing standards require alternative procedures for confirmations not returned by the customer. Which of the following would not be considered an alternative procedure?

The criterion used by most merchandising and manufacturing clients for determining when revenue recognition takes place is whether title to the goods has passed.

Discuss the audit procedures performed when testing the detail tie-in objective for accounts receivable, and explain why this objective is ordinarily tested before any other objectives for accounts receivable.

Audit procedures designed to uncover credit sales made after the client's fiscal year-end that relate to the current year being audited provide evidence for which of the following audit objectives?

It is common to use a combination of positive and negative confirmations by sending the latter to accounts with large balances and the former to those with small balances.

Auditors must maintain control of confirmations until they are returned from the customer.

Cutoff misstatements occur when

The Demand for Audit and Other Assurance Services

The CPA Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Materiality

Assessing the Risk of Material Misstatement

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

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

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters

Exam 16: Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Analytical procedures

Describe the differences between positive and negative confirmations. Which type is generally viewed as more reliable?

Auditors use the results of the substantive tests of transactions of sales and the collection cycle to determine the extent to which inherent risk is satisfied for each accounts receivable balance-related audit objective.

Cutoff misstatements occur

When positive confirmations are used, auditing standards require alternative procedures for confirmations not returned by the customer. Which of the following would not be considered an alternative procedure?

The criterion used by most merchandising and manufacturing clients for determining when revenue recognition takes place is whether title to the goods has passed.

Discuss the audit procedures performed when testing the detail tie-in objective for accounts receivable, and explain why this objective is ordinarily tested before any other objectives for accounts receivable.

Audit procedures designed to uncover credit sales made after the client's fiscal year-end that relate to the current year being audited provide evidence for which of the following audit objectives?

It is common to use a combination of positive and negative confirmations by sending the latter to accounts with large balances and the former to those with small balances.

Auditors must maintain control of confirmations until they are returned from the customer.

Cutoff misstatements occur when

The Demand for Audit and Other Assurance Services

The CPA Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Materiality

Assessing the Risk of Material Misstatement

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

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

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters