Which of the following is/are the least persuasive type of audit evidences? 1. Photocopies of sales invoices inspected by the auditor 2. Documents obtained by auditor from third parties directly 3. Bank statements obtained from the client 4. Computations made by the auditor. 1, 3 and 4 only 1 and 3 only 2 only 1 only Which one of the following indicates high degree of detection risk in respect to fi

Which of the following is/are the least persuasive type of audit evidences? 1. Photocopies of sales invoices inspected by the auditor 2. Documents obtained by auditor from third parties directly 3. Bank statements obtained from the client 4. Computations made by the auditor. 1, 3 and 4 only 1 and 3 only 2 only 1 only Which one of the following indicates high degree of detection risk in respect to fi

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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Select from the following the main object of an audit. a. Expression of expert opinion b. Detection and Prevention of fraud and error c. Preparation of financial statements d. Examination of books of accounts
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.
3. Fraud is an _____________ misstatement of which any amount found during the audit will be considered material. Question 3 options: a) Unintentional b) Planned c) Proposed d) Intentional
Why is it more important to search for unrecorded notes payablethan for unrecorded notes receivable? Suggest audit procedures that the auditor can useto uncover unrecorded notes payable.
The following questions concern types of audit tests.Choose the best response.a. The auditor looks for an indication on duplicate sales invoices to see whether theaccuracy of invoices has been verified. This is an example of(1) a test of details of balances. (3) a substantive test of transactions.(2) a test of control. (4) both a test of control and a substantivetest of transactions.
Why do you think companies were not able to detect the fraud in their previous audit?
Read the case. Then answer the questions based on it. BACKGROUND: Audit standards indicate that there is a presumption that auditors will confirm accounts receivable unless the balance is immaterial, confirmations are deemed ineffective, or the auditors' assessment of risk is low and other procedures will achieve the same objective. However, these instances are considered few and far between and current trends in auditing indicate that there is an expectation that accounts receivable will be confirmed. Auditors may stratify the population, use haphazard or judgmental sampling, and send positive or negative requests. Jenner & Jenner CPAs are the auditors for the Leno Company. In reviewing the accounts receivable aging, the auditors learn that there is a high number of accounts with balances, there are some very large and very small balances, and many customers' balances consist of multiple invoices. 2. How should the auditors mitigate the risk associated with both very large and…
12. The audit of revenue and receivables is of significant audit risk because Select one:a. The understatement of revenue results in a corresponding overstatement of net incomeb. Understatement of revenue has been a factor in many instances of fraudulent financial reportingc. Overstatement of revenue has been a factor in many instances of fraudulent financial reporting,d. The overstatement of revenue results in a corresponding understatement of net income
WHAT ARE THE TWO TYPES OF FRAUD THAT AUDITOR CONSIDERS IN ASSESSING THE PROBABILITY OF FRAUD?
The risk of not detecting a misstatement resulting from fraud is greater than that resulting from error because Group of answer choices It is the responsibility of the management to detect fraud and the auditor’s responsibility is confined only to the detection of material errors The auditor designs procedures that only detect material misstatements from error Fraud involves acts designed to conceal it, such as collusion, forgery, or deliberate failure to record transactions. The professional standards do not require the auditor to discover information that is indicative of fraud
Which of the following types of audit evidence is the least persuasive? a. Bank statements obtained from the client. O b. O c. Prenumbered purchase order forms. O d. Correspondence from the client's attorney about litigation. Test counts of inventory performed by the auditor.