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

Explore all topics

Which of the following audit procedures would not likely detect a client's decision to pledge or factor accounts receivable?

Free

(Multiple Choice)

4.9/5

(39)

Question 1

Correct Answer:

Verified

For effective internal control,employees maintaining the accounts receivable subsidiary ledger should not also approve:

Free

(Multiple Choice)

4.8/5

(35)

Question 2

Correct Answer:

Verified

List three of the major factors affecting sample size for confirming accounts receivable.

Free

(Essay)

4.9/5

(38)

Question 3

Correct Answer:

Verified

The factors include:
•performance materiality
•inherent risk (e.g.,relative size of total accounts receivable,number of accounts,prior-year results,and expected misstatements)
•control risk
•achieved detection risk from other substantive tests (extent and results of substantive tests of transactions,analytical procedures,and other tests of details)
•type of confirmation (negatives normally require a larger sample size)

Tests of the presentation and disclosure-related objectives are generally done as part of the completion phase of the audit.

(True/False)

4.9/5

(37)

Question 4

The net realizable value of accounts receivable is equal to:

(Multiple Choice)

4.8/5

(38)

Question 5

When an auditor uses negative confirmations,several factors must be considered.What are those factors?

(Essay)

4.8/5

(38)

Question 6

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.

(True/False)

4.8/5

(30)

Question 7

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 objective?

(Multiple Choice)

4.8/5

(26)

Question 8

A listing of the balances in the accounts receivable master file at the balance sheet date,by total balance outstanding and by the amount of time the component parts have been outstanding,is the:

(Multiple Choice)

4.9/5

(39)

Question 9

For which of the following accounts is cutoff least important?

(Multiple Choice)

4.8/5

(37)

Question 10

Cutoff misstatements can occur for:

(Multiple Choice)

4.9/5

(36)

Question 11

When a customer does not return an accounts receivable confirmation,it is acceptable,without performing alternative procedures,to assume the amount is 100% overstated when generalizing from the sample to the population.

(True/False)

5.0/5

(43)

Question 12

The most important test of details of balances to determine the existence of recorded accounts receivable is:

(Multiple Choice)

4.8/5

(40)

Question 13

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.

(Essay)

4.8/5

(37)

Question 14

A confirmation is a type of audit evidence.

(True/False)

4.9/5

(40)

Question 15

How might the auditor determine whether a client has limited rights to accounts receivable?

(Multiple Choice)

4.8/5

(37)

Question 16

Below are listed possible misstatements that could occur in the sales and collections cycle.Provide the analytical procedure that would be most useful in detecting the possible misstatement. a.Overstatement of sales and accounts receivable b.Uncollectible accounts receivable that have not been provided for c.Overstatement of sales returns and allowances

(Essay)

4.7/5

(37)

Question 17

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

(Essay)

4.8/5

(39)

Question 18

Which of the following is likely to be determined first when performing tests of details for accounts receivable?

(Multiple Choice)

4.8/5

(33)

Question 19

Briefly describe the circumstances in which it is acceptable to use negative confirmation requests.

(Essay)

4.7/5

(37)

Question 20

Showing 1 - 20 of 101

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

Which of the following audit procedures would not likely detect a client's decision to pledge or factor accounts receivable?

For effective internal control,employees maintaining the accounts receivable subsidiary ledger should not also approve:

List three of the major factors affecting sample size for confirming accounts receivable.

Tests of the presentation and disclosure-related objectives are generally done as part of the completion phase of the audit.

The net realizable value of accounts receivable is equal to:

When an auditor uses negative confirmations,several factors must be considered.What are those factors?

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.

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 objective?

A listing of the balances in the accounts receivable master file at the balance sheet date,by total balance outstanding and by the amount of time the component parts have been outstanding,is the:

For which of the following accounts is cutoff least important?

Cutoff misstatements can occur for:

When a customer does not return an accounts receivable confirmation,it is acceptable,without performing alternative procedures,to assume the amount is 100% overstated when generalizing from the sample to the population.

The most important test of details of balances to determine the existence of recorded accounts receivable is:

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.

A confirmation is a type of audit evidence.

How might the auditor determine whether a client has limited rights to accounts receivable?

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

Which of the following is likely to be determined first when performing tests of details for accounts receivable?

Briefly describe the circumstances in which it is acceptable to use negative confirmation requests.

The Assurance Services Market

The Audit Standards Setting Process

Audit Reports

Legal Liability Considerations for Auditors

Ethics and the Audit Profession

Audit Responsibilities and Objectives

Nature and Type of Audit Evidence

Audit Planning

Considering Materiality and Audit Risk

Considering Internal Control

Considering the Risk of Fraud

Implications of Information Technology for the Audit Process

Developing the Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

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 Inventory and Warehousing Cycle

Audit of the Payroll and Personnel Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Audit Completion

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters