Exam 7: Revenue and Collection Cycle

For each of the tests of controls for sales and receivables,indicate the assertion that is supported by placing the correct letter in the blank.

A client has a separate sales group for its largest "preferred" customers.This is a select group of customers that normally make purchases in excess of $250,000 and often have accounts receivable balances in excess of $1 million.Which of the following audit procedures would the auditor most likely perform?

___________________________ may be used to access computerized receivable files to select and print confirmations.

Vouching debits from a sample selection of customers' accounts receivable records to supporting sales invoices is an audit procedure designed to obtain evidence about the assertion of

To determine whether sales transactions have been recorded in the proper accounting period,the auditor performs cutoff tests.Which of the following best describes the overall approach used when performing cutoff tests?

When a sample of customer accounts receivable is selected for vouching debits,auditors will vouch them to

Assertions related to account balances are ________________________________,________________________________,_________________________________ ________________________________,_________________________________ and ________________________________.

In determining the adequacy of the allowance for uncollectible accounts,the least valuable evidence would be obtained from

The most effective audit procedure for determining the collectability of an account receivable is the

Custody of inventory is transferred to the shipping area upon authorization of

You are the auditor for Wilson Wholesale Products,Inc.As part of the audit of accounts receivable,Wilson has provided you an electronic file representing its accounts receivable as of its fiscal year-end.The file includes the customer name,customer address,customer number,sales invoice number,sales invoice date,and amount. Required: Describe three or more substantive audit procedures you might perform using computer-assisted audit tools and techniques (CAATs)with this computer file.

When accounts receivable are confirmed at an interim date,auditors need not be concerned with

Prenumbering invoices,shipping documents,and sales orders is a practice to achieve which of the following assertions?

In the audit of accounts receivable,the most important emphasis should be on the

The accountants who record cash receipts and credits to customer accounts should not handle the cash.

The file that contains sales transactions that were initiated in the system but are not yet completed is the

Revenues are normally considered to have been earned when

A small business owner can best offset the lack of separation of duties by

If the auditor obtains sufficient competent evidence on the client's accounts receivable balance by alternative procedures because it is impractical to confirm accounts receivable,the auditor's opinion should be unqualified and could be expected to

The primary consideration when planning whether to send confirmations of accounts receivable before the balance sheet date is the