Question 1

Tests of controls over the authorization assertion for long-term debt would include:

Accepted Answer

A)  reviewing the minutes of the board of directors meetings. 
B)  tracing new debt issuances to the appropriate ledger. 
C)  tracing cash received from debt to the cash receipts journal and general ledger. 
D)  All of the above. 
A)  reviewing the minutes of the board of directors meetings. 
B)  tracing new debt issuances to the appropriate ledger. 
C)  tracing cash received from debt to the cash receipts journal and general ledger. 
D)  All of the above. A

Question 2

Auditing the consolidation process is not required if the equity method is used.

Accepted Answer

A) True 
 B)False  False

Question 3

All entities with which a company has long-term relationship are consolidated.

Accepted Answer

A) True 
 B)False  False

Question 4

A current tax liability is recognized for:

Accepted Answer

A)  the current year's net loss. 
B)  the current year's net income. 
C)  estimated taxes payables for the current year. 
D)  estimated taxes payable for the previous year. 
A)  the current year's net loss. 
B)  the current year's net income. 
C)  estimated taxes payables for the current year. 
D)  estimated taxes payable for the previous year.

Question 5

A stock transfer agent:

Accepted Answer

A)  maintains corporate records of stock issued. 
B)  maintains records of current and previous shareholders. 
C)  maintains records of current shareholders. 
D)  All of the above. 
A)  maintains corporate records of stock issued. 
B)  maintains records of current and previous shareholders. 
C)  maintains records of current shareholders. 
D)  All of the above.

Question 6

Testing the valuation of securities would involve:

Accepted Answer

A)  tracing security values to internal sources of information. 
B)  comparing inputs used in the valuation process to the underlying documents. 
C)  tracing amounts shown in the investment ledger to amounts shown on investment statements. 
D)  None of the above. 
A)  tracing security values to internal sources of information. 
B)  comparing inputs used in the valuation process to the underlying documents. 
C)  tracing amounts shown in the investment ledger to amounts shown on investment statements. 
D)  None of the above.

Question 7

Detail tests of balances for debt include:

Accepted Answer

A)  sending confirmations to creditors requesting information concerning outstanding debt. 
B)  a search of activity subsequent to year-end for any payments linked to debt that was not disclosed. 
C)  a search of the cash receipts journal for amounts received relating to new debt. 
D)  All of the above. 
A)  sending confirmations to creditors requesting information concerning outstanding debt. 
B)  a search of activity subsequent to year-end for any payments linked to debt that was not disclosed. 
C)  a search of the cash receipts journal for amounts received relating to new debt. 
D)  All of the above.

Question 8

Disclosures are meant to facilitate comparisons between entities that select different measurement attributes for similar assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 9

If a client is in violation of a debt covenant, the debt is shown as short-term.

Accepted Answer

A) True 
 B)False

Question 10

Deferred tax liabilities are estimated using both current and estimated tax rates.

Accepted Answer

A) True 
 B)False

Question 11

Long-term debt is included in short-term liabilities if:

Accepted Answer

A)  debt covenants are violated. 
B)  debt covenants are waived. 
C)  no portion of the debt is due the following year. 
D)  All of the above. 
A)  debt covenants are violated. 
B)  debt covenants are waived. 
C)  no portion of the debt is due the following year. 
D)  All of the above.

Question 12

Proof of cash detects deposits not recorded in the books.

Accepted Answer

A) True 
 B)False

Question 13

Kiting involves inter-bank transfers.

Accepted Answer

A) True 
 B)False

Question 14

Post-employment benefits are:

Accepted Answer

A)  considered a form of deferred compensation. 
B)  considered an expense. 
C)  not included in the calculation of compensation expense. 
D)  paid to retired persons. 
A)  considered a form of deferred compensation. 
B)  considered an expense. 
C)  not included in the calculation of compensation expense. 
D)  paid to retired persons.

Question 15

In auditing mergers and acquisitions, the auditor:

Accepted Answer

A)  first understands whether a pooling of interest method is allowed. 
B)  first reads the agreement between the parties to understand the transaction. 
C)  first determines of the event is material or not. 
D)  All of the above. 
A)  first understands whether a pooling of interest method is allowed. 
B)  first reads the agreement between the parties to understand the transaction. 
C)  first determines of the event is material or not. 
D)  All of the above.

Question 16

Discuss an auditor's objectives in the audit of equity accounts. Describe appropriate
analytical procedures an auditor may apply to equity accounts.

Accepted Answer

The main control concerns for equity tra

Question 17

Which of the following is a derivative?

Accepted Answer

A)  Interest rate swap. 
B)  Currency hedge. 
C)  Oil price hedge. 
D)  All of the above. 
A)  Interest rate swap. 
B)  Currency hedge. 
C)  Oil price hedge. 
D)  All of the above.

Question 18

Substantive analytical procedures over stock transactions include:

Accepted Answer

A)  calculation of fully diluted EPS. 
B)  calculation of dividend payout ratio. 
C)  calculation of debt to equity. 
D)  All of the above. 
A)  calculation of fully diluted EPS. 
B)  calculation of dividend payout ratio. 
C)  calculation of debt to equity. 
D)  All of the above.

Question 19

In auditing a defined benefit plan, the auditor must:

Accepted Answer

A)  recalculate the over- or under- funded status of the plan. 
B)  trace the amount shown as pension expense to the cash journal. 
C)  determine if any gains or losses need to be disclosed. 
D)  All of the above. 
A)  recalculate the over- or under- funded status of the plan. 
B)  trace the amount shown as pension expense to the cash journal. 
C)  determine if any gains or losses need to be disclosed. 
D)  All of the above.

Question 20

Variable interest entities:

Accepted Answer

A)  may be accounted for either using consolidation or fair value. 
B)  often do not specify who has the controlling interest. 
C)  can be used to shield liabilities from disclosure. 
D)  All of the above. 
A)  may be accounted for either using consolidation or fair value. 
B)  often do not specify who has the controlling interest. 
C)  can be used to shield liabilities from disclosure. 
D)  All of the above.

Tests of controls over the authorization assertion for long-term debt would include:

Auditing the consolidation process is not required if the equity method is used.

All entities with which a company has long-term relationship are consolidated.

A current tax liability is recognized for:

A stock transfer agent:

Testing the valuation of securities would involve:

Detail tests of balances for debt include:

Disclosures are meant to facilitate comparisons between entities that select different measurement attributes for similar assets and liabilities.

If a client is in violation of a debt covenant, the debt is shown as short-term.

Deferred tax liabilities are estimated using both current and estimated tax rates.

Long-term debt is included in short-term liabilities if:

Proof of cash detects deposits not recorded in the books.

Kiting involves inter-bank transfers.

Post-employment benefits are:

In auditing mergers and acquisitions, the auditor:

Discuss an auditor's objectives in the audit of equity accounts. Describe appropriate analytical procedures an auditor may apply to equity accounts.

Which of the following is a derivative?

Substantive analytical procedures over stock transactions include:

In auditing a defined benefit plan, the auditor must:

Variable interest entities:

An Introduction to Auditing

Overview of an Integrated Audit

The Auditors Role in Society

Legal Environment Affecting Audits Pt Iii Executing an Integrated Audit

Client Acceptance and Continuance and Preliminary Engagement Procedures

Audit Planning and Risk Assessment

Internal Control, Understanding the Clients Internal Control Over Financial Reporting and Auditing Design Effectiveness

Planning and Testing Operating Effectiveness of Internal Control Over Financial Reporting

Substantive Procedures and the Financial Statement Audit

Auditing Revenue Process: Sales, Billing and Collection in the Health-Care Provider and Retailing Industries

Completing the Integrated Audit and Reporting

The Acquisition and Payments Cycle and Related Accounts: Purchases, Cash Disbursements and Other Related Activities in the Automotive Industry

Auditing Human Resources Cycle Process: Personnel and Payroll in Service Industries

Auditing Inventory Processes: Tracking and Costing Products in the Land Development and Home Building Industry

Topics Beyond the Integrated Audit

Filters

Exam 15: Assets, Liabilities and Equity Related to the Financing Cycle

Tests of controls over the authorization assertion for long-term debt would include:

Auditing the consolidation process is not required if the equity method is used.

All entities with which a company has long-term relationship are consolidated.

A current tax liability is recognized for:

A stock transfer agent:

Testing the valuation of securities would involve:

Detail tests of balances for debt include:

Disclosures are meant to facilitate comparisons between entities that select different measurement attributes for similar assets and liabilities.

If a client is in violation of a debt covenant, the debt is shown as short-term.

Deferred tax liabilities are estimated using both current and estimated tax rates.

Long-term debt is included in short-term liabilities if:

Proof of cash detects deposits not recorded in the books.

Kiting involves inter-bank transfers.

Post-employment benefits are:

In auditing mergers and acquisitions, the auditor:

Discuss an auditor's objectives in the audit of equity accounts. Describe appropriate analytical procedures an auditor may apply to equity accounts.

Which of the following is a derivative?

Substantive analytical procedures over stock transactions include:

In auditing a defined benefit plan, the auditor must:

Variable interest entities:

An Introduction to Auditing

Overview of an Integrated Audit

The Auditors Role in Society

Legal Environment Affecting Audits Pt Iii Executing an Integrated Audit

Client Acceptance and Continuance and Preliminary Engagement Procedures

Audit Planning and Risk Assessment

Internal Control, Understanding the Clients Internal Control Over Financial Reporting and Auditing Design Effectiveness

Planning and Testing Operating Effectiveness of Internal Control Over Financial Reporting

Substantive Procedures and the Financial Statement Audit

Auditing Revenue Process: Sales, Billing and Collection in the Health-Care Provider and Retailing Industries

Completing the Integrated Audit and Reporting

The Acquisition and Payments Cycle and Related Accounts: Purchases, Cash Disbursements and Other Related Activities in the Automotive Industry

Auditing Human Resources Cycle Process: Personnel and Payroll in Service Industries

Auditing Inventory Processes: Tracking and Costing Products in the Land Development and Home Building Industry

Topics Beyond the Integrated Audit

Filters