TRUE-FALSE QUESTIONS 1. Auditors should expect clients to have only one revenue process in place. 2. The
Question:
TRUE-FALSE QUESTIONS
1. Auditors should expect clients to have only one revenue process in place.
2. The revenue cycle begins when the goods are shipped to a customer.
3. An important inherent risk in the revenue cycle is that revenue will be recorded prior to when it has been earned.
4. Determining whether revenue has been earned is a very straightforward process that is not subject to inherent risk.
5. Recent research by COSO indicates that the majority of fraudulent financial statements involved inappropriate recording of revenue.
6. When assessing fraud risk factors, the auditor should consider the client’s motivation to increase revenue because of either internal or external pressures.
7. It is not possible for internal controls to mitigate risks associated with the valuation of accounts receivable.
8. Using prenumbered shipping documents is a control that can provide reasonable assurance that all sales are recorded.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg