Showing 121 to 130 of 371 Questions
  • Explain why, in verifying bank reconciliations, most auditors emphasize the possibility of a nonexistent deposit in transit being included in the reconciliation and an outstanding check being omitted rather than the omission of a deposit in transit and the inclusion of a nonexistent outstanding check.

  • Following are audit procedures commonly performed in the inventory and warehousing cycle for a manufacturing company:1. Read the client's physical inventory instructions and observe whether they are being followed by those responsible for counting the inventory.2. Account for a sequence of inventory tags and trace each tag to the physical

  • Following are some of the tests of controls and substantive tests of transactions procedures commonly performed in the acquisition and payment cycle. Each is to be done on a sample basis.1. Trace transactions recorded in the acquisitions journal to supporting documentation, comparing the vendor’s name, total dollar amounts, and authoriz

  • Following are some of the tests of controls and substantive tests of transactions procedures often performed in the payroll and personnel cycle. (Each procedure is to be done on a sample basis.)1. Reconcile the monthly payroll total for direct manufacturing labor with the labor cost distribution.2. Examine the time card for the approval o

  • For each of the following misstatements in property, plant, and equipment accounts, state an internal control that the client can implement to prevent the misstatement from occurring and a substantive audit procedure that the auditor can use to discover the misstatement:1. The asset lives used to depreciate equipment are less than reasona

  • For the audit of Carbald Supply Company, Carole Wever, CPA, is conducting a test of sales for 9 months of the year ended December 31, 2011.Included among her audit procedures are the following:1. Foot and cross-foot the sales journal and trace the balance to the general ledger.2. Review all sales transactions for reasonableness.3. Select

  • For the audit of the financial statements of Mercury Fifo Company, Stella Mason, CPA, has decided to apply nonstatistical audit sampling in the tests of controls and substantive tests of transactions for sales transactions. Based on her knowledge of Mercury's operations in the area of sales, she decides that the EPER is likely to be 3% an

  • Give an example of the use of attributes sampling, MUS, and variables sampling in the form of an audit conclusion.

  • Give the reasons why inventory is often the most difficult and time consuming part of many audits.

  • How do bank confirmations differ from positive confirmations of accounts receivable? Distinguish between them in terms of the nature of the information confirmed, the sample size, and the appropriate action when the confirmation is not returned after the second request. Explain the rationale for the differences between these two types of