Question 1

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

Accepted Answer

A) obtaining a summary of receivables transactions from the interim date to the year-end date. 
B) obtaining a year-end trial balance of receivables,comparing it to the interim trial balance,and obtaining evidence and explanations for large variations. 
C) sending negative confirmations to all the customers as of the year-end date. 
D) considering the necessity for some additional confirmations as of the balance sheet date if balances have increased materially. 
A) obtaining a summary of receivables transactions from the interim date to the year-end date. 
B) obtaining a year-end trial balance of receivables,comparing it to the interim trial balance,and obtaining evidence and explanations for large variations. 
C) sending negative confirmations to all the customers as of the year-end date. 
D) considering the necessity for some additional confirmations as of the balance sheet date if balances have increased materially. C

Question 2

When obtaining evidence about accounts receivable,auditors must put emphasis on the completeness and obligations assertions.
Question also found in study guide

Accepted Answer

A) True 
 B)False  False

Question 3

Auditing the details of customer payments listed in bank deposits in comparison to details of customer payment postings can detect _________________________________.
Question also found in study guide

Accepted Answer

lapping

Question 4

The negative request form of accounts receivable confirmation is useful particularly when the $$\begin{array} { | l | l | l | } 
\hline \begin{array} { l } 
\text { Assessed Level of Risk of Material } \
\text { Misstatement Relating to Receivables Is }
\end{array} & \begin{array} { l } 
\text { Number of Small } \
\text { Balances Is }
\end{array} & \begin{array} { l } 
\text { Proper Consideration by } \
\text { the Recipient Is }
\end{array} \
\hline \text { A. Low } & \text { Many } & \text { Likely } \
\hline \text { B. Low } & \text { Few } & \text { Unlikely } \
\hline \text { C. High } & \text { Few } & \text { Likely } \
\hline \text { D. } \text { High } & \text { Many } & \text { Likely } \
\hline
\end{array}$$

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 5

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

Accepted Answer

A) Miscellaneous income. 
B) Petty cash. 
C) Miscellaneous expense. 
D) Sales returns. 
A) Miscellaneous income. 
B) Petty cash. 
C) Miscellaneous expense. 
D) Sales returns.

Question 6

Auditors should not place total reliance on controls to the exclusion of other substantive testing procedures.
Question also found in study guide

Accepted Answer

A) True 
 B)False

Question 7

A computer generally cannot be used for scanning large files of accounts receivable for unusual credit balances.
Question also found in study guide

Accepted Answer

A) True 
 B)False

Question 8

Credit checks should be performed by the sales department before credit is approved.
Question also found in study guide

Accepted Answer

A) True 
 B)False

Question 9

Write-offs of doubtful accounts should be approved by

Accepted Answer

A) the salesperson. 
B) the credit manager. 
C) the treasurer. 
D) the cashier. 
A) the salesperson. 
B) the credit manager. 
C) the treasurer. 
D) the cashier.

Question 10

Which of the following might be detected by auditors' cutoff review and examination of sales journal entries for several days prior to the balance sheet date?

Accepted Answer

A) Lapping year-end accounts receivable. 
B) Inflating sales for the year. 
C) Kiting bank balances. 
D) Misappropriating merchandise. 
A) Lapping year-end accounts receivable. 
B) Inflating sales for the year. 
C) Kiting bank balances. 
D) Misappropriating merchandise.

Question 11

Which of the following statements is correct concerning the use of negative confirmation requests?

Accepted Answer

A) Unreturned negative confirmation requests rarely provide significant explicit evidence. 
B) Negative confirmation requests are effective when detection risk is low. 
C) Unreturned negative confirmation requests indicate that alternative procedures are necessary. 
D) Negative confirmation requests are effective when understatements of account balances are suspected. 
A) Unreturned negative confirmation requests rarely provide significant explicit evidence. 
B) Negative confirmation requests are effective when detection risk is low. 
C) Unreturned negative confirmation requests indicate that alternative procedures are necessary. 
D) Negative confirmation requests are effective when understatements of account balances are suspected.

Question 12

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

Accepted Answer

A) creating an internal audit department. 
B) installing the latest computer equipment and software. 
C) being actively involved in the accounting process. 
D) relying on the external auditor to detect errors. 
A) creating an internal audit department. 
B) installing the latest computer equipment and software. 
C) being actively involved in the accounting process. 
D) relying on the external auditor to detect errors.

Question 13

The auditor maintains control of the mailing and receipt of confirmations by typically performing all of the following except

Accepted Answer

A) preparing the confirmation letters. 
B) mailing the confirmation letters. 
C) receiving the confirmation letters. 
D) None of the above. 
A) preparing the confirmation letters. 
B) mailing the confirmation letters. 
C) receiving the confirmation letters. 
D) None of the above.

Question 14

Cash receipts from sales on account have been misappropriated.Which of the following acts would conceal this defalcation and be least likely to be detected by an auditor?

Accepted Answer

A) Understating the sales journal. 
B) Overstating the accounts receivable control account. 
C) Overstating the accounts receivable subsidiary ledger. 
D) Understating the cash receipts journal. 
A) Understating the sales journal. 
B) Overstating the accounts receivable control account. 
C) Overstating the accounts receivable subsidiary ledger. 
D) Understating the cash receipts journal.

Question 15

When an account receivable is considered uncollectible,the person who generally authorizes the write-off is the client's

Accepted Answer

A) credit manager. 
B) treasurer. 
C) accountant. 
D) internal auditor. 
A) credit manager. 
B) treasurer. 
C) accountant. 
D) internal auditor.

Question 16

_________________________________ of accounts receivable records implies the power to alter them directly or enter transactions to alter them.
Question also found in study guide

Accepted Answer

The answer of _________________________________ of accounts receivable records implies the...

Question 17

If control risk is assessed very low,the substantive audit procedures on account balances must be expanded.
Question also found in study guide

Accepted Answer

A) True 
 B)False

Question 18

Confirmations yield evidence about existence and the gross valuation of a receivable balance.
Question also found in study guide

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) credit check file. 
B) sales detail. 
C) inventory master. 
D) pending order master. 
A) credit check file. 
B) sales detail. 
C) inventory master. 
D) pending order master.

Question 20

Assertions related to account balances are ________________________________,________________________________,_________________________________ ________________________________,_________________________________ and ________________________________.
Question also found in study guide

Accepted Answer

existence ; complete

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

When obtaining evidence about accounts receivable,auditors must put emphasis on the completeness and obligations assertions. Question also found in study guide

Auditing the details of customer payments listed in bank deposits in comparison to details of customer payment postings can detect _________________________________. Question also found in study guide

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

Auditors should not place total reliance on controls to the exclusion of other substantive testing procedures. Question also found in study guide

A computer generally cannot be used for scanning large files of accounts receivable for unusual credit balances. Question also found in study guide

Credit checks should be performed by the sales department before credit is approved. Question also found in study guide

Write-offs of doubtful accounts should be approved by

Which of the following might be detected by auditors' cutoff review and examination of sales journal entries for several days prior to the balance sheet date?

Which of the following statements is correct concerning the use of negative confirmation requests?

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

The auditor maintains control of the mailing and receipt of confirmations by typically performing all of the following except

Cash receipts from sales on account have been misappropriated.Which of the following acts would conceal this defalcation and be least likely to be detected by an auditor?

When an account receivable is considered uncollectible,the person who generally authorizes the write-off is the client's

_________________________________ of accounts receivable records implies the power to alter them directly or enter transactions to alter them. Question also found in study guide

If control risk is assessed very low,the substantive audit procedures on account balances must be expanded. Question also found in study guide

Confirmations yield evidence about existence and the gross valuation of a receivable balance. Question also found in study guide

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

Assertions related to account balances are ________________,,_ ,_ and ________________. Question also found in study guide

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 Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 7: Revenue and Collection Cycle

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

When obtaining evidence about accounts receivable,auditors must put emphasis on the completeness and obligations assertions. Question also found in study guide

Auditing the details of customer payments listed in bank deposits in comparison to details of customer payment postings can detect _________________________________. Question also found in study guide

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

Auditors should not place total reliance on controls to the exclusion of other substantive testing procedures. Question also found in study guide

A computer generally cannot be used for scanning large files of accounts receivable for unusual credit balances. Question also found in study guide

Credit checks should be performed by the sales department before credit is approved. Question also found in study guide

Write-offs of doubtful accounts should be approved by

Which of the following might be detected by auditors' cutoff review and examination of sales journal entries for several days prior to the balance sheet date?

Which of the following statements is correct concerning the use of negative confirmation requests?

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

The auditor maintains control of the mailing and receipt of confirmations by typically performing all of the following except

Cash receipts from sales on account have been misappropriated.Which of the following acts would conceal this defalcation and be least likely to be detected by an auditor?

When an account receivable is considered uncollectible,the person who generally authorizes the write-off is the client's

_________________________________ of accounts receivable records implies the power to alter them directly or enter transactions to alter them. Question also found in study guide

If control risk is assessed very low,the substantive audit procedures on account balances must be expanded. Question also found in study guide

Confirmations yield evidence about existence and the gross valuation of a receivable balance. Question also found in study guide

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

Assertions related to account balances are ________________________________,________________________________,_________________________________ ________________________________,_________________________________ and ________________________________. Question also found in study guide

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 Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Assertions related to account balances are ________________,,_ ,_ and ________________. Question also found in study guide