Exam 9: Substantive Tests of Transactions and Balances

The auditor will most likely perform extensive tests for possible understatement of

Procedures related to the purchases cut-off assertion should be designed to test whether or not all inventory:

Your client sells a high-technology product which is subject to frequent technological improvements and design changes in order to keep current with the market.Based on this information, for the inventory account, the assertion upon which you should concentrate your audit procedures is:

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:

For which of the following tests would the auditor use generalised audit softwareto test the completeness assertion of inventory?

In violation of company policy, Morley Ltd (Morley) erroneously capitalised the cost of painting its warehouse.The auditor examining 'Morley's financial report would most likely detect this when:

While undertaking the audit of the debtors' balance, you use your audit software to extract from the accounts receivable master file a report that shows those debtors with a positive balance owing that is overdue by more than 30 days.At which of the following account balance assertions is this report aimed?

'Dual-purpose tests' involve:

A client maintains perpetual inventory records in both quantities and dollars.If the assessed level of control risk is high, an auditor would probably:

In auditing intangible assets, an auditor would determine whether the amortisation amount is reasonable in support of management's financial statement assertion of:

The physical count of inventory of Clyers Pty Ltd, a medium-sized retailer, was higher than shown by the perpetual records.Which of the following could explain the difference?

Which of the following auditing procedures most likely would provide assurance about a manufacturing entity's assertion of valuation and allocation of inventory?

Which of the following is not a primary objective of the auditor in undertaking substantive testing of current assets?

An auditor, having accounted for a sequence of inventory tags, traces information on a representative number of tags to the physical inventory sheets.The purpose of this procedure is to obtain assurance that:

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

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

An auditor will usually trace the details of the test counts of inventory items selected from the factory floor while observing the inventory stocktake through to a final inventory schedule.This audit procedure is undertaken to provide evidence of which assertion(s)?

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

The auditor is least likely to use generalised audit software to:

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