Exam 9: Substantive Tests of Transactions and Balances

The primary difference between an audit of the statement of financial position and an audit of the income statement lies in the fact that the audit of the income statement deals with the verification of:

When a client company does not maintain its own share records, the auditor should obtain written confirmation from the share registrar concerning:

An auditor reviews the credit ratings of customers with overdue outstanding accounts receivable balances.The auditor's most likely purpose is to obtain evidence concerning management's assertions about:

An auditor analyses the repairs and maintenance expense account primarily to obtain evidence that:

To determine whether accounts payable are complete, an auditor commonly performs sampling procedures to test whether all merchandise received is recorded.The population of documents for this test consists of all:

An auditor should perform alternative procedures to substantiate the existence of an account receivable when:

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

To test for unsupported entries in the ledger, the direction of audit testing should be from the:

Which of the following audit procedures is least likely to detect an unrecorded liability?

An auditor most likely would make enquiries of production and sales personnel concerning possible obsolete or slow-moving inventory to support management's account balance assertion of:

An auditor reconciles the total of the accounts receivable subsidiary ledger to the general ledger control account, as at 30 June 2015.By this procedure, the auditor would be most likely to learn of which of the following?

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

The audit working papers often include a client-prepared, aged trial balance of accounts receivable as at balance date.This ageing is best used by the auditor to:

An auditor selected items that are on the store floor for test counts while observing a client's physical inventory.The auditor then traced the test counts to the client's inventory listing.This procedure most likely obtained evidence concerning management's assertion of:

The auditor is least likely to learn of retirements of equipment through which of the following?

A client's physical count of inventory was higher than the inventory per the perpetual records.This situation could be the result of the failure to record:

An auditor is testing sales transactions.One step is to trace a sample of debit entries from the accounts receivable subsidiary ledger back to the supporting sales invoices.What would the auditor intend to establish by this step?

Hoang is engaged in the audit of a power company that supplies power to a residential community.All accounts receivable balances are small and the internal control structure is effective.Customers are billed twice monthly.In order to obtain evidence with regards the valuation and allocation assertion of the accounts receivable balances as at balance date, Hoang would most likely:

To verify that all sales transactions have been recorded (the completeness assertion), a test of transactions should be completed on a representative sample drawn from:

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