A typical substantive procedure for receivable balance and sales transactions mayinclude ascertaining whether any receivables have been pledged or assigned. Whichof the following assertions is addressed by the audit procedure previouslymentioned? *A. IV and VB. IV and VIC. IV, V and VID. IV, VI and VIIE. VII only The following question pertain to the financial statement assertions enumeratedbelow:T- Existence or OccurrenceIl - CompletenessIII - Cut-offIV - Valuation and AllocationV- AccuracyVI - Rights and ObligationsVII – Presentation and Disclosure and Classification

Assertions: Assertions are used by the auditor to consider the different types of misstatements that…

A typical substantive procedure for receivable balance and sales transactions may include ascertaining whether any receivables have been pledged or assigned. Which of the following assertions is addressed by the audit procedure previously mentioned? * A. IV and V B. IV and VI C. IV, V and VI D. IV, VI and VII E. VII only

A typical substantive procedure for receivable balance and sales transactions may include ascertaining whether any receivables have been pledged or assigned. Which of the following assertions is addressed by the audit procedure previously mentioned? * A. IV and V B. IV and VI C. IV, V and VI D. IV, VI and VII E. VII only

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 18 Which of the following statements is true regarding assertions in the revenue cycle? All five assertions presented are equally important Under normal audit risk conditions the occurrence assertion would be more relevant than the completeness assertion Audit evidence about the existence of revenues is also the most appropriate evidence about the valuation of accounts receivable The allowance for uncollectible accounts has important implications for the ownership assertion for accounts receivable
Which of the following evidence provides the least assurance of reliability? A. Accounts receivable B. Sales invoice C. Vendor invoice D. Bank statements
True or False1. When the auditor seeks evidence concerning the allowance for doubtful accounts he or she would most likely use an aged trial balance to help identify past due balances. 2. Current auditing standards do not require the confirmation of receivables if accounts receivable are not material. 3. Accounts receivable confirmations should be prepared on the auditing firm's letterhead. 4. Alternative procedures to the confirmation of receivables include review of subsequent collections and examination of supporting documents. 5. Lapping of accounts receivable is least likely to occur when there is an inadequate segregation of duties. 6. Positive accounts receivable confirmations should be used on all accounts which represent small immaterial balances. 7. When the client has a large number of relatively small accounts receivable and the assessed level of control risk for receivables and related revenue transactions is high, the auditor is more likely to use negative…
The following are specific balance-related audit objectives applied to the audit of accounts receivable (a. through i.) and management assertions about account balances (1 through 6). The list referred to in the specific balance-related audit objectives is the list of the accounts receivable from each customer at the balance sheet date. i (Click the icon to view the audit objectives.) i (Click the icon to view the management assertions.) Requirement For each specific balance-related audit objective, identify the appropriate management assertion. (Hint: See table.) Specific balance-related audit objective There are no unrecorded receivables. b. Uncollectible accounts have been provided for. C. Receivables that have become uncollectible have been written off. d. All accounts on the list are expected to be collected within 1 year. The total of the amounts on the accounts receivable listing agrees with the general ledger balance for accounts receivable. a. e. Management assertion
explain your answer and why other options are not correct also explain
When auditing accounts receivables, auditors are usually especially concerned about the: a. Completeness and cut-off objectives. b. Existence and completeness objectives. c. Existence, realisable-value and accuracy objectives. d. Posting and summarisation objective.
Confirmation of accounts receivable is a presumptively mandatory audit procedure. In performing this procedure, auditors use positive confirmation requests or negative confirmation requests or a combination of both. Describe three conditions that should exist for the auditors to use the negative form of request.
It is common practice to audit the balance in notes payable inconjunction with the audit of interest expense and interest payable. Explain theadvantages of this approach.
11) To obtain evidence on the completeness assertion for revenue, the auditor would select a sample of shipping documents and trace them to the sales journal True False
Indicate a specific audit procedure under each of the following categories, as applied particularly in the sales and collection cycle.a. test of controlb. substantive test of transactionsc. substantive test of account balances
Audit evidence can come in different forms with different degrees of persuasiveness.Which of the following is the least persuasive type of evidence?(1) Vendor’s invoice(2) Bank statement obtained from the client(3) Computations made by the auditor(4) Prenumbered sales invoices