The financial records of the Movitz Company show that R. Dennis owes $4,100 on an account receivable. An independent audit is being carried out, and the auditors send a positive confirmation to R. Dennis. What is the most likely reason as to why a positive confirmation rather than a negative confirmation was used here?a. Control risk was particularly low for accounts receivable.b. Inherent risk was particularly high for accounts receivable.c. Dennis’s account was not yet due.d. Dennis’s account was not with a related party.

Q: The following are common tests of details of balances or analyticalprocedures for the audit of…

A: Account receivable balance-related audit objective: An appropriate audit evidence an auditor…

Q: Baker is an auditor for ABC Company. As part of a proactive fraud audit, Baker runs the following…

A: Auditor is the person who is responsible for checking and verifying financial statements  and…

Q: A client has a separate sales group for its largest “preferred” customers, a select group of…

A: Given case is: A client has a separate sales group for its largest “preferred” customers, a select…

Q: Kay & Lee LLP was retained as the auditor for Holligan Industries to audit the financial statements…

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Q: Which of the following controls will most likely justify a reduced assessed level ofcontrol risk for…

A: Given: The justification of the reduced assessed level of the risks of control using the control…

Q: When an auditor sends out bank confirmations at the year-end audit, they are performing a(n) O…

A:

Q: Which of the following is least indicative of fraudulent activity?a. Numerous cash refunds have been…

A: Answer:   Option C

Q: Post, CPA, accepted an engagement to audit the financial statements of General Co., a new client.…

A: Answer 1: If Post finds that, owing to the presence of fraud, the financial statements of General…

Q: Jane Ellerby and Sam Callison are discussing the recent fraud that occurred at LowRental Leasing,…

A: Fraudulent financial reporting: Intentional misrepresentation of financial statements to mislead the…

Q: Which of the following is an effective audit procedure that an auditor might use to detect kiting…

A: Kiting is the process in which bank misrepresent their financial instruments with the objective of…

Q: Which of the following is one of the better auditing techniques to detect kiting?(1) Review…

A: (3) Prepare year-end bank reconciliations

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A: Here discuss the details of the main assertion which are related with the Travel expenses audit by…

Q: Choose the one correct answer. Which of the following is not an appropriate question in an ICQ? *…

A: Internal Control Questionnaire -ICQ : ICQ is an important tool for conducting an audit. It is…

Q: Your firm is the external auditor of Downe Ltd (Downe). It has accepted a non-audit engagement to…

A: Requirement 1 (1) Managers at the shops regularly used cash from the cash register to pay local…

Q: Below

A:

Q: Each morning the controller gets the prior day’s list of remittances, a copy of the payment report,…

A: The controller of the cash can determine whether the cash received and remittance received were…

Q: Which of the following internal control activities will most likely prevent the concealment of a…

A: Given: The prevention of concealment of cash shortage by internal control activities.

Q: If an auditor assigns a tolerable misstatement of $1,000 to accounts payable, he or she would need…

A: Audit: It is a systematic examination of books of accounts of an individual or a firm. It is done by…

Q: Choose the one correct answer. You are the auditor of a company and you came upon the inspection of…

A: Factoring with recourse: The company sells the account receivable to the bank for receiving the…

Q: When auditing the cash account, the auditor traces the cash receipts, which are recorded on the cash…

A: Auditing refers to the process of physically evaluating and inspecting all the financial information…

Q: When in an examination of a retail firm, Lily, a recently recruited internal auditor, discovered a…

A: in the given case there was a fraud scheme in which the warehouse manager and a purchasing staff…

Q: Which of the following circumstances would most likely cause an audit team to performextended…

A: Audit procedures: These are the methods, techniques, and processes that are performed by the auditor…

Q: determine its proper allowance for loan losses

A: Option a is wrong because by making visits to the business sites, auditor cannot help in determining…

Q: When auditors perform the bank reconciliation test, what would be the appropriate audit procedure…

A: Auditing procedures of Bank Reconciliation Bank reconciliation is one of the important part in the…

Q: Golden bank recently appointed the accounting firm Sanford,Son and Golrich as the banks auditors.…

A: "Since you have asked multiple sub part question we will solve the first three question for you.  If…

Q: Which of the following types of receivables would not deserve the special attention of the auditor?…

A: Audit is the process of checking and verifying the financial statements in business and to analyse…

Q: The following are independent audit situations for which you are to recommend an appropriate audit…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Which of the following statements is invalid relating to confirmation of accounts receivable?  a. A…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

Q: You are testing the controls over bank accounts for your audit client, Orleans Ltd. You note that…

A: Bank Reconcilation: It is the process of reconcilation of an entity's bank account with its…

Q: After completing a horizontal and vertical analysis of the Balance Sheet and Income Statement.  It…

A: The answer is stated below:

Q: You are testing the controls over bank accounts for your audit client, Orleans Ltd. You note that…

A: The process of reconciling the balances in an entity’s accounting records for cash account to the…

Q: On receiving the bank cutoff statement, the auditor should trace:   a. Deposits in transit on the…

A: Explanation  On receiving a client's bank cutoff statement, an auditor most likely would trace (b)…

Q: The auditor should ordinarily send confirmation requests to all banks with whichthe client has…

A: Positive confirmation request is the inquiry made by the auditor about the account balance of a…

Q: The following are five situations,

A: Six factors that determine the reliability of the evidence as follow: Independent external source:…

Q: For each case, state the type of audit opinion which should be expressed and provide an explanation…

A: Audit Opinion While conducting the Auditing the management of the business submit their financial…

Q: As one of the year-end audit procedures, the auditor instructed the client's personnel to prepare a…

A: Bank confirmations are part of audit procedures. At every year bank balance as per cash book should…

Q: The following are independent audit situations for which you are to recommend an appropriate audit…

A: Auditing: Auditing refers to an independent examination of financial information of any…

Q: Which of the following responses to an accounts receivable confirmation at December 31 would cause…

A:

Q: Allison Everhart, an employee in accounts payable, believes she can run a fictitious invoice through…

A: Fraud is the act of deliberately conducting false reporting of facts, to acquire funds or property…

Q: Which one of the following would the auditor consider to be an incompatible operation if the cashier…

A: Incompatible Operation in Cash Receipts: The mailroom is using for receiving the checks and after…

Q: An auditor discovered the following matters while performing tests of controls 1.An invoice for…

A: Auditing is a process in which auditors checks the financial statements of the company in order to…

Q: Didrikson Rubin, the auditor of Red Barn Farm Equipment, was verifying cash payments to vendors for…

A: Fraud: In an organization, a fraud is an intentional misrepresentation of facts in the accounting…

Q: When accounts receivable are confirmed at an interim date, auditors need not be concerned witha.…

A: Step 1 Accounts receivable is frequently a vital asset so auditors required an extensive and…

Q: Which of the following would the auditor consider to be an incompatible operation if the cashier…

A: An auditor seems to be an individual who checks the authenticity of commercial transactions that…

Q: When auditing with “fraud awareness,” auditors should especially notice and reviewemployee…

A: The right is( a) The company always estimates the inventory but never takes a complete physical…

Q: 4) Consider each situation independently and describe the audit opinion that should be given and…

A:

Q: If the auditor concludes that there is a high likelihood of material misstatement in accounts…

A: Auditing means the independent checking of company operation by outsider.

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.