Matching
For the following specific audit procedures, indicate the assertion that is being tested.
Premises:
Examine consignment agreements.
Examine check register for the month following year end for disbursements relating to the audit period.
Select high dollar items from the perpetual inventory records for inspection/counting during the physical inventory.
Select vendor accounts with high activity during the year, and low balance at year-end for confirmation.
Examine vehicle registration forms to determine the registered owner.
Review bond indenture agreement and ascertain client compliance with any restrictive covenants.
Obtain the market value of short term securities as of the balance sheet date from published records.
Inspect major new additions to plant assets during the current period.
Ascertain that the financial statements comply with the industry practice of presenting a classified balance sheet.
Test the aging of accounts receivable, discussing long-overdue accounts with the credit manager.
Observe procedures, including segregation of duties, for approving sales orders.
Trace shipping documents to sales invoices.
Reperform check on accuracy of sales invoice pricing.
Trace beginning balance for accounts payable to prior year’s working papers.
Inquire of accounting and purchasing personnel about unrecorded payables.
Responses:
Existence or occurrence
Completeness
Valuation or allocation
Rights and obligations
Presentation and disclosure
Correct Answer:
Premises:
Responses:
Examine consignment agreements.
Examine check register for the month following year end for disbursements relating to the audit period.
Select high dollar items from the perpetual inventory records for inspection/counting during the physical inventory.
Select vendor accounts with high activity during the year, and low balance at year-end for confirmation.
Examine vehicle registration forms to determine the registered owner.
Review bond indenture agreement and ascertain client compliance with any restrictive covenants.
Obtain the market value of short term securities as of the balance sheet date from published records.
Inspect major new additions to plant assets during the current period.
Ascertain that the financial statements comply with the industry practice of presenting a classified balance sheet.
Test the aging of accounts receivable, discussing long-overdue accounts with the credit manager.
Observe procedures, including segregation of duties, for approving sales orders.
Trace shipping documents to sales invoices.
Reperform check on accuracy of sales invoice pricing.
Trace beginning balance for accounts payable to prior year’s working papers.
Inquire of accounting and purchasing personnel about unrecorded payables.
Premises:
Examine consignment agreements.
Examine check register for the month following year end for disbursements relating to the audit period.
Select high dollar items from the perpetual inventory records for inspection/counting during the physical inventory.
Select vendor accounts with high activity during the year, and low balance at year-end for confirmation.
Examine vehicle registration forms to determine the registered owner.
Review bond indenture agreement and ascertain client compliance with any restrictive covenants.
Obtain the market value of short term securities as of the balance sheet date from published records.
Inspect major new additions to plant assets during the current period.
Ascertain that the financial statements comply with the industry practice of presenting a classified balance sheet.
Test the aging of accounts receivable, discussing long-overdue accounts with the credit manager.
Observe procedures, including segregation of duties, for approving sales orders.
Trace shipping documents to sales invoices.
Reperform check on accuracy of sales invoice pricing.
Trace beginning balance for accounts payable to prior year’s working papers.
Inquire of accounting and purchasing personnel about unrecorded payables.
Responses:
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