Exam 9: Substantive Tests of Transactions and Balances

During the process of confirming receivables as of 30 June 2015, a positive confirmation was returned indicating the 'balance owed as of 30 June was paid on 9 July 2015'.The auditor would most likely:

When auditing Steel Ltd, a large manufacturer of building supplies, which one of the following audit procedures would give the least assurance with regards to the valuation and allocation assertion for inventory?

Which of the following is the most effective audit procedure for verification of dividends earned on investments in marketable equity securities?

Reviewing interest expense to identify payments to debt-holders not listed on the debt analysis schedule is a procedure that can be used to provide evidence for which audit assertion for loans payable:

Two months before year-end the bookkeeper erroneously recorded the receipt of a long-term bank loan by a debit to cash and a credit to sales.Which of the following is the most effective procedure for detecting this type of misstatement?

Tests designed to detect purchases made just before year-end that have been recorded in the subsequent year would provide assurance about management's assertion of:

When evaluating the risk of material misstatement with regards to defalcations involving receivables (a credit entry to accounts receivable for amounts not received), the auditor would expect an experienced bookkeeper to most likely debit which of the following accounts?

Auditors often make use of computer programs that perform routine processing functions such as sorting and merging.These programs are made available by IT companies and others and are specifically referred to as:

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

Tracing from a sample of remittance advices to determine whether associated entries are recorded in the cash receipts journal tests which of the following assertions for cash?

An auditor would be most likely to learn of slow-moving inventory through:

Which of the following procedures would best detect the theft of valuable items from an inventory that consists of hundreds of different items selling for $1 to $10, and a few items selling for hundreds of dollars?

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

In auditing accounts receivable the negative form of confirmation request most likely would be used when:

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

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

Which of the following pairs of accounts would an auditor most likely analyse on the same working paper?

You are auditing the bank account of Calcutta Ltd (Calcutta).You decide to send a standard bank confirmation request to the financial institutions with which Calcutta has done business during the year.A primary purpose of this test is to:

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:

The auditor may conclude that depreciation charges are insufficient by noting: