Exam 10: Auditing the Revenue Process

Confirmation is most likely to be a relevant form of evidence with regard to assertions about accounts receivable when the auditor has concerns about the receivables'

A CPA auditing an electric utility wishes to determine whether all customers are being billed.The CPA's best direction of test is from the

Upon receipt of customers' checks in the mailroom,a responsible employee should prepare a listing of remittances that is forwarded to the cashier.A copy of the listing should be sent to the

All of the following are important controls over credit memos except:

In the confirmation of accounts receivable,the auditor would most likely

Alpha Company uses its sales invoices for posting perpetual inventory records.Inadequate control activities over the invoicing function allow goods to be shipped that are not invoiced.The inadequate control activities could cause an

You are auditing the allowance for doubtful accounts (ADA)and perform the analytical procedures shown below.Assume that no significant changes have occurred during the year in either the client's credit policies or customer base.What concerns,if any,about adjusting the ADA should the auditor have based on the information shown below?

Cooper,CPA is auditing the financial statements of a small rural municipality.The receivable balances represent residents' delinquent real estate taxes.Internal control at the municipality is weak.To determine the existence of the accounts receivable balances at the balance sheet date,Cooper would most likely

An auditor confirms a representative number of open accounts receivable as of December 31 and investigates respondents' exceptions and comments.By this procedure,the auditor would be most likely to learn of which of the following?

When evaluating internal control of an entity that processes revenue transactions on the Internet,an auditor would be most concerned about the

In connection with the examination of financial statements by an independent auditor,the client suggests that members of the internal audit staff be utilized to minimize audit costs.Which of the following tasks could most appropriately be delegated to the internal audit staff?

Which of the following internal control activities most likely would ensure that all billed sales are correctly posted to the accounts receivable ledger?

The revenue process affects numerous accounts in the financial statements.

Alpha Company uses its sales invoices for posting perpetual inventory records.Inadequate control activities over the invoicing function allow goods to be invoiced that are not shipped.The inadequate control activities could cause an

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