Learning Objective 18-1 1) The overall objective in the audit of the acquisition and payment cycle is: A) to ensure the reliability of the affected accounts. B) to ensure the accuracy of the affected accounts. C) to evaluate whether the affected accounts are fairly presented in accordance with accounting standards. D) to evaluate whether fraudulent payments were made. 2) Which of the following accounts is […]

66.For each of the listed auditing procedures, indicate, by letter, the type of evidence it represents. a.Physical evidence b.Confirmation evidence c.Documentary evidence d.Analytical evidence e.Mathematical evidence f.Hearsay evidence ____1. Audited client-prepared bank reconciliation ____2. Vouched debits to repairs accounts by examining  vendors’                  invoices ____3. Observed the client’s year-end physical inventory ____4. Compared accounts receivable turnover with industry average ____5. Prepared ten-year income summary […]

  6-4  (Learning objective 6-7) In terms of preventing payroll fraud, why is it important for hiring and wage rate changes to be administered through a centralized and independent human resources department? 6-5  (Learning objective 6-10) If you suspect a salesperson is inflating his commissions, what would you do to determine if this were occurring? 6-6  (Learning objective 6-10) Beta is one of 10 salespeople working for ABC […]

65) Most monetary misstatements of payroll are corrected by internal verification controls or by the PCAOB. 66) Despite the large dollar amounts involved in the payroll and personnel cycle, auditors typically spend less time auditing this cycle than others. 67) It is generally more difficult for the auditor to detect payment of fraudulent hours than payment of fictitious employees. 68) Examining payroll records for an […]

  10) The exclusion of a single equity transaction is often highly material. A) True B) False 11) A prior period adjustment may result in a debit or credit to a company’s retained earnings account. A) True B) False 12) Any restrictions on the payment of dividends must be disclosed in the footnotes to the financial statements. A) True B) False 13) The accuracy of […]

89.Changes in guidance What are the major changes in guidance since the original issuance of AS 2. 90.Integrated Audit The framework for audit evidence in an integrated audit contains several key elements for the auditor to consider. Identify and discuss these key elements. GraduateWriterHelp.com is an online academic writing platform that provides extensive assistance to graduate school students as they work through their research projects, […]

4) Audit risk is the risk there will be an audit failure for a given audit engagement. A) True B) False 5) The term “audit failure” refers to the situation when the auditor has followed auditing standards yet still fails to discover that the client’s financial statements are materially misstated. A) True B) False Learning Objective 5-3 1) In the performance of an audit, a […]

Short Answer 8-7 Explain the importance of analytical procedures and why auditors may also use non-financial measures in these procedures. Short Answer 8-8 Clements & Partners are the audit firm of Manufacturing Co. and have been for 3 years. The audit firm is considering if there are any ethical or legal requirements that would prevent them from accepting the audit engagement of Manufacturing Co. again […]

  Matching Questions  42. Accountants are regulated by a variety of organizations. Match the following statements with the most directly related organizations. Organizations may be used once or not at all. 1. Issue CPA certificates 2. Formed to improve standards of financial accounting for state and local government entities 3. Prepares the CPA exam   4. Develop accounting standards for public and nonpublic companies 5. Develop accounting standards for the U.S. […]

  162.Cagna Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company’s first processing department for a recent month.   Work in process, beginning:     Units in process …………………………………………………… 700   Stage of completion with respect to materials …………. 90%   Stage of completion with respect to conversion……….. 10%   Units started into production during […]