[Auditing]

1. Consider this excerpt from an auditors documentation of the clients sales-related controls: An approved sales order must accompany every request to release inventory for shipping to customer. Which of the following tests offers the greatest assurance that this control is operating effectively? a. Select and examine sales orders and ascertain that the dates of the related shipping documents are later than those of the sales orders. b. Select and examine sales orders and ascertain that the dates of the related shipping documents are earlier than those of the sales orders. c. Select and examine shipping documents and ascertain that the dates of the related sales orders are later than those of the shipping documents. d. Select and examine shipping documents and ascertain that the dates of the related sales orders are earlier than those of the shipping documents.

2. Which of the following controls would be most effective in preventing a misstatement of the valuation assertion with respect to accounts receivable? a. The sales manager reviews a weekly sales-by-district-and-customer report, comparing it to targets established by management. b. Store managers identify slow-moving merchandise and submit recommendations for write-downs to the chief accounting officer. c. The AIS sales application will not process a sales order if it exceeds the credit limit established for the customer who placed the order. d. The file containing the master vendor list is password-protected, and once accessed, changes cannot be entered without an approval code provided by the accounting department.