Answered: Why is it more important to search for…

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Audit documentation often includes a client-prepared, aged trial balance of accounts receivable as…

A: Auditing: In auditing, auditors verify the correctness and fair presentation of financial…

Q: Bank confirmations are critical to the cash audit. What information does the auditor obtain by…

A: Answer:- Cash audit:- A specific kind of accounting audit called a "cash audit" focuses on cash…

Q: Confirmations of bank accounts may help the auditor to determine if material amounts of accounts…

A: An auditor is a professional, frequently an independent third party, who examines and verifies…

Q: Which analytical procedures are most important in verifyingnotes payable? Which types of…

A: Definition: Liabilities: The claims creditors have over assets or resources of a company are…

Q: What are your key takeaways from the receivables audit? How critical is receivables to the business?…

A: This question deals with the receivables audit.

Q: Describe the purpose and give examples of audit procedures in the search for unrecorded liabilities.

A: The search of unrecorded liabilities is the set of procedures designed to yield audit evidence of…

Q: Analyze the risks associated with auditing accounts payable. Explain the process of auditing…

A: Auditing refers to the procedure of examining or investigation of the financial statements of the…

Q: Bank confirmations are critical to the cash audit. What information does the auditor obtain by…

A: Cash audit:- A specific kind of accounting audit called a "cash audit" focuses on cash transactions…

Q: Imagine that you were auditing accounts receivable balances to confirm sales and found significant…

A: The objective of this question is to find an alternative approach to confirm sales revenue when…

Q: During the audit of Albert Eistein, what relevant assertion should be used to record loans…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want a…

Q: In order to make sure that loans are properly classified, the auditor would: a. Examine due…

A: Audit is an independent examination of the financial staemetnts of an entity to present a true and a…

Q: We discussed the difference between a) tracing a sample of transactions from the source documents to…

A: Source documents refer to the original records or materials that provide evidence of a business…

Q: What is the process of confirming accounts receivable balances. Why is it important for auditors to…

A: The main objective of the auditor is to provide an opinion on the financial statement audited. The…

Q: MOST likely to be performed before the balance sheet date? a. Determine the date of the Letter of…

A: Auditing is independent examination of financial statements to express an opinion on the financial…

Q: Why is it needed to have special audit consideration in the audit of banks?

A: Special considerations in audits are needed to check for any irregularities in the practices of the…

Q: Evidence comes in various types and has different degrees of reliability. Below are some pairs of…

A: The auditors are professional who possesses accounting, auditing, and taxation expertise. The…

Q: Match each example audit procedure with its correct general audit objective related to accounts…

A: A) Existence of assets: This refers to the verification of whether assets recorded in the financial…

Q: When preparing a bank reconciliation, if the adjusted book balance and the adjusted bank balance are…

A: Equal amount of Adjusted book balance and the adjusted bank balance doesn't tell the cash is used…

Q: When an audit team does not receive a response on a positive accounts receivable confirmation,…

A: Audit: Audit is the process of verification of the compliance of the financial statements. It…

Q: In "Printing (Copying) Money," what proof may the verbal inquiry audit technique provide

A: To conduct an audit, several measures must be taken.

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: In an audit of cash receipts, fraud detection is often a primary focus. It's up to the auditor to…

A: In this audit, the auditor focuses on cash since it is the most liquid asset of the organization.…

Q: An auditor tested the client's internal controls over granting customers credit and establishing…

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

Q: An auditor wishes to perform tests of controls on a client's cash disbursements procedures. If the…

A: a. observation and inquiry.In auditing, when control activities leave no audit trail of documentary…

Q: What are the goals of dual-direction testing regarding an audit of the accounts receivable andcash…

Q: Why do fraud examiners handle information in a different manner than auditors? Why is thisimportant?

A: Fraud examiners handle information in a different manner than auditors, in order to minimize the tax…

Q: On receiving the bank cutoff statement, the auditor should trace:

A: A bank cut off statement is the statement of bank as on a specified date which is subsequent to the…

Q: Which of the following statements about confirming accounts receivable (A/R) and accounts payable…

A: Confirmations regarding the accounts balances are one of the important elements in determining the…

Q: 3. An auditor should perform alternative procedures to substantiate the existence of accounts…

A: Answer:- Account receivable meaning:- The amount owned to a business for goods or services that…

Q: Which of the following evidence provides the least assurance of reliability? A. Accounts receivable…

A: Audit evidences can be collected from internal and external sources. Internal evidences are based on…

Q: would help an auditor determine whether accounts payable have been misstated? Examining…

A: Accounts payable (AP) is the sum owed to creditors and suppliers by a corporation (also referred to…

Question

Why is it more important to search for unrecorded notes payable
than for unrecorded notes receivable? Suggest audit procedures that the auditor can use
to uncover unrecorded notes payable.

Definition Definition Methods and techniques used by the auditor to gather the appropriate evidence so that a true and fair judgment can be made on the quality of the financial statements of the client. Audit procedures are developed after determining audit objectives, scope, approach, and risk assessment.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Why is it important to emphasize the existence assertion when auditing accounts receivable?
A3. Peng LLP is auditing the accounts receivable balance of a client. The senior in charge wants to ensure that the balance sheet assertions of existence, rights and obligation, completeness, and valuation are covered. Required: Explain how each balance sheet assertion is important for the audit of the accounts receivable balance.
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.
How do you asess the risk of material misstatement associated with the audit of cash?
Define and give examples of off-balance-sheet information. Why should auditors be concerned with such items?
4. Which of the following audit procedures is most appropriate to address the occurrence assertion for sales? a. Confirm receivables balances. b. Perform analytical procedures. c. Review collectability. d. Confirm cash deposits in banks.
An auditor is considering whether the amount of cash is accurately recorded on the financial statements. All of the following are appropriate engagement procedures for the objective except A. Examining bank reconciliations and confirming bank balances. B. Comparing cash receipt lists with the receipts journal and bank deposit slips. C. Adding totals of reconciliations and comparing with cash account balances. D. Verifying cutoff of receipts and disbursements.
What audit procedures would you use to determine that the cash balances actually exist at the balance sheet date? Is a bank statement provided by the client sufficient audit evidence?
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.
Summarize common internal controls over cash receipts and cash disbursements. Assess the purpose of a bank confirmation and why bank confirmations are an important piece of audit evidence. What are some errors and frauds that can occur in the revenue cycle? Review the process of confirming accounts receivable balances. Why is it important for auditors to understand revenue recognition rules?
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…
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.