Exam 7: Revenue and Collection Cycle

Audit documentation often includes a client-prepared,aged trial balance of accounts receivable as of the balance sheet date.The audit team uses this aging primarily to

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Question 1

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The negative request form of accounts receivable confirmation is useful particularly when the

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Question 2

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What procedures should an auditor perform for a positive confirmation that is not returned by the client's customer?

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Question 3

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Auditors have to perform alternative procedures to ensure existence.These include examining (a)subsequent cash receipts,(b)sales orders,invoices and shipping documents,and (c)correspondence files for past due accounts.Examining subsequent cash receipts is a particularly effective test because a customer's payment of the account is strong evidence that the receivable existed.The cash receipt should be traced to the remittance advice and the deposit into cash.

The following question appeared on an internal control questionnaire for sales.Next to each of the question indicate the related assertion.

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Question 4

The control activity "credit sales approved by credit department" is directed toward which transaction assertion?

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Question 5

In which of the following circumstances would the use of the negative form of accounts receivable confirmation most likely be justified?

(Multiple Choice)

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Question 6

An audit team is auditing sales transactions.One step is to vouch a sample of debit entries from the accounts receivable subsidiary ledger back to the supporting sales invoices.The purpose of this audit procedure is to establish that

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Question 7

Scanning sales invoices for missing numbers in the sequence would be an activity intended to satisfy what assertion?

(Multiple Choice)

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Question 8

Confirmations provide evidence of _ and,to a limited extent, of accounts and notes receivable.

(Short Answer)

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Question 9

A person who has access to both cash and accounts receivable records may be able to take cash receipts by

(Multiple Choice)

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Question 10

To conceal defalcations involving receivables,a dishonest bookkeeper might charge which of the following accounts?

(Multiple Choice)

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Question 11

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

(Multiple Choice)

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Question 12

The actions in tests of controls involve ________________,,,_ and ________________.

(Essay)

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Question 13

Information about the internal control system can be gathered by completing an __________________________________________.

(Short Answer)

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Question 14

Which of the following is not a valid reason for an auditor deciding not to send accounts receivable confirmations?

(Multiple Choice)

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Question 15

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?

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Question 16

Confirmations of accounts receivable provide the most evidence for which of the following assertions?

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Question 17

An auditor noted that client sales had increased 10 percent for the year.At the same time,cost of goods sold as a percentage of sales had decreased from 45 percent to 40 percent and year-end accounts receivable had increased by 8 percent.The auditor interviewed the sales manager who stated that the increase in sales without a corresponding increase in cost of goods sold was due to a price increase enacted by the company during the year.How would the auditor best test the sales manager's representation?

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Question 18

Two widely used confirmation forms to test accounts receivable are _ and _ confirmations.

(Short Answer)

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Question 19

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

(Multiple Choice)

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Question 20

Showing 1 - 20 of 109

Audit documentation often includes a client-prepared,aged trial balance of accounts receivable as of the balance sheet date.The audit team uses this aging primarily to

The negative request form of accounts receivable confirmation is useful particularly when the

What procedures should an auditor perform for a positive confirmation that is not returned by the client's customer?

The following question appeared on an internal control questionnaire for sales.Next to each of the question indicate the related assertion.

The control activity "credit sales approved by credit department" is directed toward which transaction assertion?

In which of the following circumstances would the use of the negative form of accounts receivable confirmation most likely be justified?

An audit team is auditing sales transactions.One step is to vouch a sample of debit entries from the accounts receivable subsidiary ledger back to the supporting sales invoices.The purpose of this audit procedure is to establish that

Scanning sales invoices for missing numbers in the sequence would be an activity intended to satisfy what assertion?

Confirmations provide evidence of _ and,to a limited extent, of accounts and notes receivable.

A person who has access to both cash and accounts receivable records may be able to take cash receipts by

To conceal defalcations involving receivables,a dishonest bookkeeper might charge which of the following accounts?

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

The actions in tests of controls involve ________________,,,_ and ________________.

Information about the internal control system can be gathered by completing an __________________________________________.

Which of the following is not a valid reason for an auditor deciding not to send accounts receivable confirmations?

Confirmations of accounts receivable provide the most evidence for which of the following assertions?

Two widely used confirmation forms to test accounts receivable are _ and _ confirmations.

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

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

Exam 7: Revenue and Collection Cycle

Audit documentation often includes a client-prepared,aged trial balance of accounts receivable as of the balance sheet date.The audit team uses this aging primarily to

The negative request form of accounts receivable confirmation is useful particularly when the

What procedures should an auditor perform for a positive confirmation that is not returned by the client's customer?

The following question appeared on an internal control questionnaire for sales.Next to each of the question indicate the related assertion.

The control activity "credit sales approved by credit department" is directed toward which transaction assertion?

In which of the following circumstances would the use of the negative form of accounts receivable confirmation most likely be justified?

An audit team is auditing sales transactions.One step is to vouch a sample of debit entries from the accounts receivable subsidiary ledger back to the supporting sales invoices.The purpose of this audit procedure is to establish that

Scanning sales invoices for missing numbers in the sequence would be an activity intended to satisfy what assertion?

Confirmations provide evidence of _________________________________ and,to a limited extent,________________________________ of accounts and notes receivable.

A person who has access to both cash and accounts receivable records may be able to take cash receipts by

To conceal defalcations involving receivables,a dishonest bookkeeper might charge which of the following accounts?

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

The actions in tests of controls involve ________________________________,________________________________,________________________________,_________________________________ and ________________________________.

Information about the internal control system can be gathered by completing an __________________________________________.

Which of the following is not a valid reason for an auditor deciding not to send accounts receivable confirmations?

Confirmations of accounts receivable provide the most evidence for which of the following assertions?

Two widely used confirmation forms to test accounts receivable are _________________________________ and _________________________________ confirmations.

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

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

Confirmations provide evidence of _ and,to a limited extent, of accounts and notes receivable.

The actions in tests of controls involve ________________,,,_ and ________________.

Two widely used confirmation forms to test accounts receivable are _ and _ confirmations.