Question 3 Which of the following is an analytical procedure that an auditor most likely would perform when planning an audit? 1. Scanning payroll files for terminated employees. 2. Confirming a sample of accounts payable. 3. Comparing current year balances to budgeted balances. 4. Recalculating interest expense based on notes payable balance. 0 4 O 1 O 2 3.
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- asap F Identify the primary audit objectives that auditors hope to accomplish by confirming a client's year-end accounts receivable. Explain the difference between "positive" and "negative" confirmation requests and discuss the quality of audit evidence yielded by each.Question 39 An auditor is required to confirm accounts receivable if the accounts receivable balances are: Older than one year Material to the financial statements Smaller than esxpected Subject to valuation estimatesWhich of the following provides the highest-quality evidence regarding the Valuation of recorded accounts payable? Question 5 options: Inspecting invoices for all cash disbursements during the year. Performing analytical procedures. Confirming balances with creditors and suppliers. Recalculating the balance of accounts payable.
- 2. In determining the validity of accounts receivable, which of the following would the auditor consider most reliable? a. Direct telephone communication between the auditor and debtor b. Confirmation replies received directly from customers c. Credits to accounts receivable from the cash receipts book after the close of business at year end d. Documentary evidence that supports the accounts receivable balanceQ1 The following are specific balance-related audit objectives applied to the audit of accounts receivable (a. through h.) and management assertions about account balances (1 through 4). The list referred to in the specific balance-related audit objectives is the list of the accounts receivable from each customer at the balance sheet date. Specific Balance-Related Audit Objective a . There are no unrecorded receivables. b . Receivables have not been sold or discounted. c . Uncollectible accounts have been provided for. d . Receivables that have become uncollectible have been written off. e . All accounts on the list are expected to be collected within 1 year. f . The total of the amounts on the accounts receivable listing agrees with the general ledger balance for accounts receivable. g . All accounts on the list arose from the normal course of business and are not due from related parties. h . Sales cutoff at year-end is proper. ----------------- Management Assertion about…Q1 The following are specific balance-related audit objectives applied to the audit of accounts receivable (a. through h.) and management assertions about account balances (1 through 4). The list referred to in the specific balance-related audit objectives is the list of the accounts receivable from each customer at the balance sheet date. Specific Balance-Related Audit Objective a . There are no unrecorded receivables. b . Receivables have not been sold or discounted. c . Uncollectible accounts have been provided for. d . Receivables that have become uncollectible have been written off. e . All accounts on the list are expected to be collected within 1 year. f . The total of the amounts on the accounts receivable listing agrees with the general ledger balance for accounts receivable. g . All accounts on the list arose from the normal course of business and are not due from related parties. h . Sales cutoff at year-end is proper. Management Assertion about Account Balances 1 .…
- Statements 1. Revenue and expense accounts are audited in conjunction with related 2. 3. The 4. 5. 6. 7. Material fluctuations revealed by analytical procedures should be investigated to determine whether they are indicative of material in the financial statements. When paper paychecks are issued, the company's of the company. A 11 accounts. department of the company should authorize changes in employee pay rates. should distribute them to the employees is a list of all specific disclosures required by financial accounting standards. The primary purpose of the primarily responsible for the fairness of the financial statements. The auditors should obtain a letter from the client's attorneys describing is to have the client's principal officers acknowledge that they are 8. In estimating the total likely misstatement in the financial statements, the auditors should combine misstatements, projected misstatements, and judgmental misstatements. 9. If the auditors conclude that the total…Question 10 When an auditor is reviewing an audit client's allowance for doubtful accounts the auditing is assessing which management assertion about the client's accounts receivables. Existance Completeness Valuation Rights and obligationsAuditors ordinarily ascertain whether payroll checks are properly endorsed during the auditofa. Clock cards.b. The voucher system.c. Cash in bank.d. Accrued payroll.
- Which of the following would provide an auditor with the most reliable evidence reguarding the existence of accounts receivable? A. A copy of the invoice sent to the customer. B. Acopy of the customer's sales order held by the client. C. An accounts receivable confirmation received by the auditor from the client's customer. D. An aging schedule showing the composition of the year-end-accounts receivable balance.Quesion 1: The following are various potential misstatements due to errors or fraud (1 through 7), and a list of auditing procedures (a. through h.) the auditor would con- sider performing to gather evidence to determine whether the error or fraud is present possible Misstatements Due to errors or Fraud 1. The auditor suspects that a lapping scheme exists because an accounting department employee who has access to cash receipts also maintains the accounts receivable led- ger and refuses to take any vacation or sick days. 2. The auditor suspects that the entity is inappropriately increasing the cash reported on its balance sheet by drawing a check on one account and not recording it as an outstanding check on that account and simultaneously recording it as a deposit in a second account. 3. The entity’s cash receipts of the first few days of the subsequent year were properly deposited in its general operating account after the year-end. However, the auditor suspects that the entity…Which of the following is the best audit procedure for determining the existence of unrecorded liabilities?a. Examine confirmation requests returned by creditors whose accounts are on a subsidiary trial balance of accounts payable.b. Examine a sample of cash disbursements in the period subsequent to year-end.c. Examine a sample of invoices a few days prior to and subsequent to the year-end to ascertain whether they have been properly recorded.d. Examine unusual relationships between monthly accounts payable and recorded purchases.