Auditors consider financial statement assertions to identify appropriate audit procedures. For items a through f, match each
Question:
Assertion
a. Completeness
b. Cutoff
c. Existence and occurrence
d. Presentation and disclosure
e. Rights and obligations
f. Valuation
Statement
1. There is such an asset.
2. The company legally owns the assets.
3. All assets have been recorded.
4. Transactions are recorded in the correct accounting period.
5. Assets are recorded at proper amounts.
6. Assets are properly classified.
Auditors perform audit procedures to obtain audit evidence that will allow them to draw reasonable conclusions as to whether the client’s financial statements follow generally accepted accounting principles. Match each audit procedure with its type. Each type of audit procedure is used; one is used twice.
Audit Procedures
g. Prepare a flowchart of internal control over sales.
h. Calculate the ratio of bad debt expense to credit sales.
i. Determine whether disbursements are properly approved.
j. Confirm accounts receivable.
k. Compare current financial information with comparable prior periods.
Type of Audit Procedure
7. Analytical procedures
8. Tests of controls
9. Risk assessment procedures (other than analytical procedures)
10. Test of details of account balances, transactions, or disclosures
Financial Statements
Financial 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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Related Book For
Principles of Auditing and Other Assurance Services
ISBN: 978-0078025617
19th edition
Authors: Ray Whittington, Kurt Pany
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