A client uses percentages of aging categories to calculate the allowance for doubtful accounts.  When auditing the allowance for doubtful accounts, the auditor must…   Question 4 options:   Ensure that the client’s aging categories are consistent with industry averages.   Ensure that the client has calculated the allowance for the current and all prior years using the same percentages for uncollectible accounts.   Perform tests to ensure that the aging categories are accurate.   Perform tests to ensure that management has not exercised judgment when calculating the allowance for doubtful accounts.

Q: Which of the following audit procedures is least appropriate for addressing the assertion of…

A: Assertion of Valuation is one of the 7 assertions of Auditing. Under the assertion of valuation, it…

Q: The auditor attempts to correct for the risk of under-auditing (ineffectiveness) and over-auditing…

A: Auditing is the process of examining financial statements, records, and other financial information…

Q: A client that recently loosened its credit-granting policies uses percentages of aging categories as…

A: Lets understand the basics. Management prepares allowance for doubtful debt account in order to…

Q: the auditor is planning to use accounts payable confirmations when auditing the client's accounts…

A: Accounts payable confirmations refer to a process used by auditors to verify the accuracy and…

Q: Auditors make materiality judgments during the planning phase of the audit in order to be sure they…

A: 1.

Q: While performing your audit of Williams Paper Company, you discover evidence that indicates that…

A: Going Concern: A going concern is a word used in accounting to describe a corporation that has the…

Q: Auditors try to identify predictable relationships when using analytical procedures. Relationships…

A: Analytical processes are a crucial step in the audit process and involve evaluating financial data…

Q: You are auditing the balance in the prepaid insurance account for your audit client.  a) Name and…

A: Prepaid Insurance : It is a type of current Asset which is shown in the Balance Sheet of a Company…

Q: In performing an audit, you encounter an adjusting journal entry recorded at year-end that contains…

A: Answer: A liability

Q: In auditing, ____________ is the process of identifying and assessing the risks of material…

A: Auditing refers to an official inspection of the financial information of an organization. Auditing…

Q: When planning an audit, which of the following is not a factor that affects auditors’ decisions…

A: An auditor is a professional body appointed by firm or enterprise to examine books of accounts and…

Q: Once risks are identified, auditors assess the risk of material misstatement at the _______ level…

A: Solution: Once risks are identified, auditors assess the risk of material misstatement at the…

Q: A client uses percentages of aging categories to calculate the allowance for doubtful accounts.…

A: The business entities are required to audit their financial statements so as to know whether the…

Q: tch the type of risk with the related definition. A. Detection risk B. Control risk C. Inherent risk…

A: Solution:- 1. The probability that an auditor will give an inappropriate opinion on financial…

Q: Auditing standards require that a “brainstorming” session should be held at the beginning of each…

A:

Q: maximur

A: the auditor after considering the client's internal control over receivables increased the…

Q: Case 5 You are auditing the financial statement of Pasig Company for the fllst tume You have…

A: Accrued salary-decrease income Accrued interest income-increase income

Q: statement would appear in the:   a. Engagement letter.

A: The right answer is option c.  Management representation letter.

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.