What is the most relevant assertion when auditors examine whether transactions are recorded in the right period?

accuracy.occurrence.cutoff.valuation or allocation.

39.Which of theseproceduresis notused totestthe operating effectiveness of a control? Confirmation of balances. Inspection of documentation. Observation of company operations. Inquiry of client personnel.

40.All of the followingmay implya material weakness except for... Ineffective oversight by the audit committee. Immaterial fraud committed by senior management. Evidence of a material misstatement. Overproduction by the manufacturing plant. 41.What would an auditor, Mark, do if he assesses control risk at the maximum level? perform more audit procedures using internal evidence. perform a great deal of substantive testing during the audit. perform a great deal of additional tests of controls. perform substantive tests at an interim date. 42When doesa companynormally record a sale? sales invoice. customer purchase order. payment check. bill of lading. 43Which document generates recording of a sale? customer order. invoice. shipping order. purchase order.

44General MotorCorporation recorded sales through January 4, 2015, dating them December 31, 2014. This situation is an example of a violation of which of the following assertions? Completeness Existence or occurrence Classification Accuracy

45Which of the following is related to the control environment? Segregation of duties Management's philosophy and operating style Information processing Performance reviews

46When there isnoproper segregation of duties in a small company, Luck Grocery Store, what is the bestmethod to compensate for it? Allowing for greater management oversight of incompatible activities Requiring accountants to pass a yearly background check Disclosing lack of segregation of duties to the external auditors during the annual review Replacing personnel every three or four years

47 What is the purpose of the analytical proceduresin the planning stages? determine the existence of unrecorded liabilities or overstated assets. identify unusual conditions that deserve additional audit effort. identify the types of errors or frauds that can occur in transactions. identify the appropriate schedules to be prepared by the client.

48What is David's motivationif hecommits fraud to pay the expenses of acharitableorganization? egocentric. economic. psychotic. ideological.

49

When do we normally consider that revenues are earned the company has substantially accomplished what it must to be entitled to the benefits. goods have been shipped. all possibility of return has expired. the cash is collected.

50.What is not required by auditing standards when an auditor, David, audits financial statements? Report all errors and frauds found to police authorities. Understand the nature of errors and frauds. Assess the risk of occurrence of errors and frauds. Design audits to provide reasonable assurance of detecting errors and frauds. 51What do we call it when we have two people open mail? anti-collusion. joint custody. separation of duties. lapping. 52What is the next step an auditor, David, would do after obtaining an understanding ofthe financial reporting control activities? document the understanding obtained. plan the remainder of the audit work. test the client's control activities. assess the final control risk. 53

What does the risk of material misstatement include?

Inherent risk, control risk, and detection risk.Inherent risk and control risk.Control risk and detection risk.Inherent risk and detection risk.

54What kind of risk is related to failing to meet company objectives? Business risk. Information risk. Audit risk. Inherent risk. 55If an auditor, David Owen, learned that there is possible noncompliance by his client, he should understand the issue to evaluate the effect on the financial statements. consider whether other similar acts may have occurred. recommend remedial actions to the audit committee. determine the reliability of management's representations.

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