Develop TWO audit procedures to gather sufficientand appropriate testing for Operating expenses,Accounts Receivables, Inventory, Cost of Goods Sold,Dividends, Cash and Cash Equivalents, Other Incomeand Retained Earnings.Explain the objective of each procedure: What risk orissue are you trying to address with the procedure?

The first procedure involves the examination of invoices, receipts, and other documents related to…

Answered: Develop TWO audit procedures to gather…

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter2: Audits Of High-risk Accounts

Section2.7: Bankrate, Inc.

Problem 4Q

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Auditors try to identify predictable relationships when using analytical procedures. Relationships involving transactions from which of the following accounts would most likely yield the highest level of evidence? a. Accounts receivable. O b. Interest expense. O c. Travel and entertainment expense. O d. Accounts payable.
Auditors try to identify predictable relationships when using analytical procedures. Relationshiipss involvingtransactions fromwhich of the following accounts most likely would yield the highest level of evidence? a. accounts receivable b. interest expense c. accounts payable d. Travel and entertainment expense
Which is not a Risk Assessment Procedure? a. Ratio Analysis b. Observation of Activities c. Account Receivable confirmations d. Inspection of Documents e. Inquiry of Internal Auditors
In auditing the accrued liabilities account on the Balance Sheet, an auditor’s procedures most likely would focus primarily on management’s assertion ofa. Existence or occurrence.b. Completeness.c. Presentation and disclosure.d. Valuation or allocation.
Once risks are identified, auditors assess the risk of material misstatement at the _______ level for these significant classes of transactions and account balances. A. disclosure B. financial statement C. relevant assertion level D. account
When auditing account balances of liabilities, auditors are most concerned with management’s assertion abouta. Existence.b. Rights and obligations.c. Completeness.d. Valuation and allocation.
Discuss the meaning of the following terms and how they apply to auditing accounts receivable: a. tie-in b. completeness c. existence d. accuracy e. rights f. realizable value g. cutoff h. classification Please provide references.
Analytical procedures consist of evaluating financial information by studying financial and nonfinancial data and looking for plausible or implausible relationships. The procedures can range from making simple comparisons to using complex models involving many relationships and elements of data. They can involve time-series comparisons of recorded amounts and ratios developed from recorded amounts, and they always include comparison to expectations developed by the auditors Describe three purposes of analytical procedures. ) Identify three sources of information from which an auditor develops expectations when performing analytical procedures
Professional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.
Describe the purpose and give examples of audit procedures in the search for unrecorded liabilities.
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Analytical procedures consist of evaluations of financial informationmade by a study of plausible relationships among both financial and nonfinancial data.They range from simple comparisons to the use of complex models involving manyrelationships and elements of data. They involve comparisons of recorded amounts, orratios developed from recorded amounts, to expectations developed by the auditors.a. Describe the broad purposes of analytical procedures.b. When are analytical procedures required during an audit? Explain why auditors useanalytical procedures extensively in all parts of the audit.c. Describe the factors that influence the extent to which an auditor will use the resultsof analytical procedures to reduce detailed tests in meeting audit objectives.*

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