In order to help the audit team assigned to the audit of a major client's property, plant and equipment accounts better understand the link between auditing assertions and this area of the audit, the audit manager with overall responsibility for this part of the audit has convened a meeting. Which of the choices below would be the supervisor's best response to help explain this relationship? The easiest way to understand this relationship is to imagine taking our list of assertions, determining which ones apply to the client's property, plant and equipment accounts, and then finding ways to test the assertions we selected. For example, we might decide to test the valuation and allocation assertion by examining documents to see if the client has defaulted on any debt associated with these assets. The easiest way to understand this relationship is to imagine taking our list of assertions, determining which ones apply to the client's property, plant and equipment accounts, and then finding ways to test the asser

In order to help the audit team assigned to the audit of a major client's property, plant and equipment accounts better understand the link between auditing assertions and this area of the audit, the audit manager with overall responsibility for this part of the audit has convened a meeting. Which of the choices below would be the supervisor's best response to help explain this relationship? The easiest way to understand this relationship is to imagine taking our list of assertions, determining which ones apply to the client's property, plant and equipment accounts, and then finding ways to test the assertions we selected. For example, we might decide to test the valuation and allocation assertion by examining documents to see if the client has defaulted on any debt associated with these assets. The easiest way to understand this relationship is to imagine taking our list of assertions, determining which ones apply to the client's property, plant and equipment accounts, and then finding ways to test the asser

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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Listed in the table below are some common audit procedures. For each procedure below: Identify whether it is a test of control (TOC), substantive test of transaction (STOT), analytical procedure (AP) or a test of details of balances (TODOB). Write your answer in the 2nd column of the table below. State one audit objective that is being satisfied. Write your answer in the 3rd column of the table below. Procedure (a) Type of Test (b) Audit Objective Example: Compare the quantity and description of items on duplicate sales invoices with related shipping documents. STOT Accuracy 1.Foot the list of accounts payable and trace the balance to the general ledger. 2. Account for the sequence of purchase orders 3. Select a sample of purchase transactions from purchase journal and trace them to vendors’ invoices and statements 4. Exam cash payments subsequent to the balance date to see if they are related to unrecorded…
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Which of the following audit phases would generally be conducted last in relation to the others? * Auditing business processes and related accounts. Preliminary assessment of materiality and audit risk. O Preliminary analytical procedures. Consideration of internal control systems.
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