EBK PRINCIPLES OF AUDITING & OTHER ASSU
21st Edition
ISBN: 9781260299434
Author: WHITTINGTON
Publisher: YUZU
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Chapter 10, Problem 38KOQ
To determine
Identify the appropriate answer related to the importance of client representative in the auditing process.
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The auditors should insist that a representative of the client be present during the inspection and count of securities toa. Lend authority to the auditors’ directives.b. Detect forged securities.c. Coordinate the return of all securities to proper locations.d. Acknowledge the receipt of securities returned.
Which of the following types of documentary evidence should the auditor consider the most reliable?a. Sales invoice created by the client with the support of proof of delivery from an outside delivery serviceb. Confirmation of debt balances sent and returned directly to the auditorc. Check made by the company and includes a sign of approval of the party receiving the money, which is included in the bank statement sent directly to the auditord. An audit list prepared by the client controller and reviewed by the client treasurer.
Which of the following procedures would provide the most reliable audit evidence?a. Inquiries of the client’s internal audit staff.b. Inspection of prenumbered client purchase orders filed in the vouchers payable department.c. Inspection of vendor sales invoices received from client personnel.d. Inspection of bank statements obtained directly from the client’s financial institution.
Chapter 10 Solutions
EBK PRINCIPLES OF AUDITING & OTHER ASSU
Ch. 10 - Prob. 1RQCh. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Prob. 7RQCh. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 10RQ
Ch. 10 - Prepare an example of lapping of cash receipts,...Ch. 10 - Prob. 12RQCh. 10 - Prob. 13RQCh. 10 - Prob. 14RQCh. 10 - Prob. 15RQCh. 10 - Prob. 16RQCh. 10 - Explain two procedures by which auditors may...Ch. 10 - Prob. 18RQCh. 10 - Prob. 19RQCh. 10 - Prob. 20RQCh. 10 - Prob. 21RQCh. 10 - Prob. 22RQCh. 10 - Prob. 23RQCh. 10 - Prob. 24RQCh. 10 - Prob. 25RQCh. 10 - Prob. 26QRACh. 10 - Henry Mills is responsible for preparing checks,...Ch. 10 - During the first few months of the year, John...Ch. 10 - Prob. 29QRACh. 10 - Prob. 30QRACh. 10 - Prob. 31QRACh. 10 - Prob. 32QRACh. 10 - Prob. 33QRACh. 10 - Prob. 34QRACh. 10 - Prob. 35QRACh. 10 - Prob. 36QRACh. 10 - Prob. 37QRACh. 10 - Select the best answer for each of the following...Ch. 10 - Prob. 38BOQCh. 10 - Prob. 38COQCh. 10 - Prob. 38DOQCh. 10 - Prob. 38EOQCh. 10 - Prob. 38FOQCh. 10 - Reconciliation of the bank account should not be...Ch. 10 - The auditors suspect that a clients cashier is...Ch. 10 - Prob. 38IOQCh. 10 - Prob. 38JOQCh. 10 - Prob. 38KOQCh. 10 - Prob. 38LOQCh. 10 - Which of the following represents a correct...Ch. 10 - Which of the following correctly identifies a risk...Ch. 10 - Which of the following correctly identifies a risk...Ch. 10 - Prob. 39DOQCh. 10 - Prob. 39EOQCh. 10 - Prob. 39FOQCh. 10 - Prob. 40OQCh. 10 - Prob. 41OQCh. 10 - Prob. 42OQCh. 10 - Prob. 43OQCh. 10 - Prob. 44OQCh. 10 - Prob. 45OQCh. 10 - Prob. 46PCh. 10 - Prob. 47PCh. 10 - Prob. 48PCh. 10 - Prob. 49PCh. 10 - Prob. 50ITCCh. 10 - Prob. 51ITCCh. 10 - Prob. 52RDCCh. 10 - Prob. 53EC
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- Explain the responsibilities of external auditors in detecting fraud in the financial statements.arrow_forwardAuditors should plan and perform their audits to provide reasonable assurance of detecting material misstatements in financial statements, including those resulting from fraud a.Distinguish between fraudulent financial reporting and misappropriation of assets. b. Describe the three fundamental conditions necessary for the commission of fraud. Provide an illustration of these three conditions for a case of fraudulent financial reporting. c. Describe the three ways in which the auditors may respond to fraud risks in an audit.arrow_forwardTests of controls in a GAAS audit are required fora. Obtaining evidence about the financial statement assertions.b. Accomplishing control over the occurrence of recorded transactions.c. Applying analytical procedures to financial statement balances.d. Obtaining evidence about the operating effectiveness of client control activitiearrow_forward
- Tests of controls in a GAAS audit are required fora. Obtaining evidence about the financial statement assertions.b. Accomplishing control over the occurrence of recorded transactions.c. Applying analytical procedures to financial statement balances.d. Obtaining evidence about the operating effectiveness of client control activities.arrow_forwardRequirement: Indicate where management assertions are being validated by the below substantive auditprocedures. Existence/Occurrence(E/O) Rights &obligations(R/O) Completeness(C) Valuation andallocation/Accuracy(V/A) Presentation& disclosure(P/D) a. Inspect securities on handand confirm securitiesheld by custodian.b. Trace serial numberindicated in the securityto the list of investmentsecurities maintained bythe client.c. The investment securitieslisted on the schedule ofinvestment transactionsof the client aremathematically accurateand agree with thegeneral ledger.d. Read minutes of meetingof board of directorsregarding investmentsused as collateral forborrowings.e. Recalculate gains andlosses on sale ofsecurities.f. Recalculate interest anddividend revenues.g. Inspect securitiessimultaneously with countof other liquid assets.h. Verify fair values ofsecurities with publishedprice quotations.i. Obtain an understandingon management’s processin classifying…arrow_forwardAnalyze the risks associated with auditing accounts payable. Explain the process of auditing accounts payable using confirmations. Determine why third parties are important to the audit of debt and equity. How do auditors interact with third parties to gain audit evidence when auditing debt and equity? Why is it important that auditors determine if the client is complying with debt provisions?arrow_forward
- During the review of loan contracts and agreements, the auditor would most likely figure out the following, except: A. The existence of loans. B. The completeness of loans. C. Related disclosures pertaining to assets pledged as collateral. D. The accuracy of interest expense recorded by the entity.arrow_forwardWhich internal controls should the auditor be most concernedabout in the audit of notes payable? Explain the importance of each.arrow_forwardWhen obtaining an understanding of the entity and its environment, including its internal control, the auditor may identify events or conditions that indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Such events or conditions are referred to as Group of answer choices Fraud environment. Fraud risk factors. Fraudulent activities. Fraud conditionsarrow_forward
- An audit plan for noncurrent debt should include steps that require a. Inspecting the accounts payable subsidiary ledger b. Examining bond trust indentures. c. Investigating credits to the bond interest income account. d. Verifying the existence of the bondholders. e. Tracing vendor invoices to the account payable subsidiary ledger.arrow_forwardInternally generated evidence held by the client includes: a) bank statements. b) correspondence with the client's lawyers. c) copies of invoices sent to customers. d) expert valuations.arrow_forwardthe auditor is planning to use accounts payable confirmations when auditing the client's accounts payable. The use of accounts payable confirmations will test which of the following assertions? a. rights and obligations b. existence (only) c. existence and completeness d. cutoffarrow_forward
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