Exam 7: Revenue and Collection Cycle

To determine whether sales transactions have been recorded in the proper accounting period,the auditor performs cutoff tests.Which of the following best describes the overall approach used when performing cutoff tests?

Which of the following internal control activities will most likely prevent the concealment of a cash shortage by improperly writing off a trade account receivable?

___________________________ may be used to access computerized receivable files to select and print confirmations. Question also found in study guide

If the auditor obtains sufficient competent evidence on the client's accounts receivable balance by alternative procedures because it is impractical to confirm accounts receivable,the auditor's opinion should be unqualified and could be expected to

In evaluating the adequacy of the allowance for doubtful accounts,an auditor most likely reviews the entity's aging of receivables to support management's financial statement assertion of

The sum of customers' unpaid balances that is compared to the general ledger balance comes from

You are the auditor for Wilson Wholesale Products Inc.As part of the audit of accounts receivable,Wilson has provided you an electronic file representing its accounts receivable as of its fiscal year-end.The file includes the customer name,customer address,customer number,sales invoice number,sales invoice date,and amount. Required: Describe three or more substantive audit procedures you might perform using computer-assisted audit tools and techniques (CAATs)with this computer file.

The aging information for accounts receivable is typically used in connection with assessing the allowance for doubtful accounts. Question also found in study guide

The most effective audit procedure for determining the collectability of an account receivable is the

An auditor should normally perform alternative procedures to substantiate the existence of accounts receivable when

When an audit team traces a sample of shipping documents to the related sales invoice copies,they are trying to find relevant evidence that

A customer reply on a positive confirmation says "We dispute the $250 charge.We believe it is excessive." This confirmation

Auditors sometimes use comparisons of ratios as audit evidence.An unexplained decrease in the ratio of gross profit to sales may suggest which of the following possibilities?

Write-offs of doubtful accounts should be approved by

The financial records of the Movitz Company show that Mr.Dennis owes $4,100 on an account receivable.An independent audit is being carried out and the auditors send a positive confirmation to Mr.Dennis.What is the most likely reason as to why a positive confirmation rather than a negative confirmation was used here?

When an account receivable is considered uncollectible,the person who generally authorizes the write-off is the client's

The auditor maintains control of the mailing and receipt of confirmations by typically performing all of the following except

Which of the following most likely would be detected by an auditor's review of a client's sales cutoff?

What is dual direction testing?

Two widely used confirmation forms to test accounts receivable are _________________________________ and _________________________________ confirmations. Question also found in study guide