The accounting processing cycle: is the process of transferring revenue and expense balances to retained earnings.Оis the process used to identify, analyze, record, and summarize transactions and prepare financial statements.оis the process of bringing the company's financial information up to date before preparing the financialstatements.provides an independent review to ensure management has appropriately applied generally acceptedaccounting principles in preparing financial statements.

Option 1: This option is incorrect because this describes the closing process, which is just one…

Answered: is the process of transferring revenue…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter1: Quality Auditing: Why It Matters

Section: Chapter Questions

Problem 2CYBK

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Indicate whether each statement describes financial accounting or managerial accounting. The information is directed at external users who are making decisions pertaining to investing, extending credit, and other decisions. The principal users are the organizations managers. The key focus is on the entity as a whole. The rules and principles are very flexible. The information gathered is usually available after an independent audit has been completed.
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.
Which area of accounting needs a computerized accounting information system the mostâ€”payroll, tax, or preparing financial statements?
What accounting policies are disclosed in the notes accompanying a companys financial statements? Why is this disclosure important?
1. An auditor most likely would review an entity’s periodic accounting for the numerical sequence of shipping documents and invoices to support management’s financial statement assertion of a. Valuation b. Completeness c. Existence and occurrence d. Rights and obligations
An audit trail enables a person to trace a source document to its ultimate effect on the financial statements or work back from amounts in the financial statements to source documents. Describe in detail the audit trail for the following: a. Purchases of inventoryb. Sales of inventoryc. Employee payroll
The subject matter of information in auditing includes what? A. The financial statements of the enterprise (e.g. Balance Sheet, Income Statement, Statement of Cash Flow, Statement of Changes in Shareholder’s Equity and the notes to financial statements) B. Financial reporting framework C. Assets and Liabilities D. Income and Expenses
Which of the following is not a function of an Accounting information system? Select one: a. The supply of information useful for making decisions. b. The efficient and effective collection and storage of data concerning an organizations financial activities. c.The determining and evaluating of alternative courses of action d. The implementation of controls to accurately record and process data
The auditor's report is where the auditor certifies that the financial statements present fairly the financial position, results of operations, and cash flows of the company. O True O False ………..
What is the primary purpose of internal controls in an Accounting Information System (AIS )? a) To generate financial statements b) To ensure data accuracy and integrity c) To facilitate decision-making processes d) To comply with tax regulations
Explain the role of the auditor in the financial reporting process.
What is the purpose of an audit of a company's financial statements? Provide references if any.

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