Exam 10: Substantive Tests of Transactions and Balances

One of the primary reasons for preparing a reconciliation between interest-bearing obligations outstanding during the year and interest expense presented in the financial report is to:

When perpetual inventory records are maintained, and control risk for inventory is high, the auditor would probably:

Which of the following audit procedures would an auditor be least likely to perform using generalised audit software?

Which of the following is the best argument against the use of negative accounts receivable confirmations?

When outside firms of non-accountants specialising in the taking of physical inventories are used to count, list, price and subsequently compute the total dollar amount of inventory on hand at the date of the physical count, The auditor will ordinarily:

Which of the following is the best audit procedure for determining the completeness of the accrued liabilities listing?

To establish the existence and ownership of a long-term investment in the shares of a publicly traded company, an auditor ordinarily performs a security count or:

An auditor reconciles the total of the accounts receivable subsidiary ledger to the general ledger control account, as at 30 June 2012. By this procedure, the auditor would be most likely to learn of which of the following?

The auditor is most likely to verify the liability account 'accrued commissions payable' in conjunction with the:

In determining the adequacy of the allowance for uncollectible accounts, the least reliance should be placed upon which of the following?

A normal audit procedure is to analyse the current year's repairs and maintenance accounts to provide evidence in support of the audit proposition that:

Which assertion for ending inventory is most likely at risk of material misstatement if the gross profit percentage is much greater than last year?

An auditor usually examines receiving reports to support entries in the:

In auditing accounts payable, an auditor's procedures most likely would focus primarily on management's assertion of:

Which of the following is not a primary objective of the auditor in undertaking substantive testing of accounts receivable?

In the examination of property, plant and equipment, which of the following does the auditor not try to determine?

Which of the following analytical procedures should be applied to the income statement?

Which of the following explanations might satisfy an auditor who discovers significant debits to an accumulated depreciation account?

In order to efficiently test the purchases/accounts payable cut-off, an auditor will be most likely to:

All of the following can assist the auditor in testing the existence assertion for investment securities except: