AUDITING & ASSURANCE SERVICES CONNECT AC
10th Edition
ISBN: 9781259292057
Author: MESSIER
Publisher: MCG
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Chapter 13, Problem 13.25MCQ
To determine
Concept Introduction:
Inventory is the most valuable asset for a company. The company applies controls over inventory for its safeguard and detection of inventory frauds. The auditor also tests these controls to determine the nature and extent of the
To choose: The least interested item for the auditor.
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The purpose of tracing a sample of inventory tags to a client’s computerized listing of inventory items is to determine whether the inventory itemsa. Represented by tags were included on the listing.b. Included on the listing were properly counted.c. Represented by tags were reduced to the lower of cost or market.d. Included in the listing were properly valued.
Chapter 13 Solutions
AUDITING & ASSURANCE SERVICES CONNECT AC
Ch. 13 - Prob. 13.1RQCh. 13 - Prob. 13.2RQCh. 13 - Prob. 13.3RQCh. 13 - Prob. 13.4RQCh. 13 - Prob. 13.5RQCh. 13 - Prob. 13.6RQCh. 13 - Prob. 13.7RQCh. 13 - Prob. 13.8RQCh. 13 - Prob. 13.9RQCh. 13 - Prob. 13.10RQ
Ch. 13 - Prob. 13.11RQCh. 13 - Prob. 13.12RQCh. 13 - Prob. 13.13RQCh. 13 - Prob. 13.14MCQCh. 13 - Prob. 13.15MCQCh. 13 - Prob. 13.16MCQCh. 13 - Prob. 13.17MCQCh. 13 - Prob. 13.18MCQCh. 13 - Prob. 13.19MCQCh. 13 - Prob. 13.20MCQCh. 13 - Prob. 13.21MCQCh. 13 - Prob. 13.22MCQCh. 13 - Prob. 13.23MCQCh. 13 - Prob. 13.24MCQCh. 13 - Prob. 13.25MCQCh. 13 - Prob. 13.26MCQCh. 13 - Prob. 13.27PCh. 13 - Prob. 13.28PCh. 13 - Prob. 13.29PCh. 13 - Prob. 13.30PCh. 13 - Prob. 13.31PCh. 13 - Prob. 13.32P
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- Does the use of a perpetual system eliminate the need for taking a physical inventory count?arrow_forwardwhat are the audit asssertions related to inventory?arrow_forwardExplain the relationship between tests of the acquisitionand payment cycle and tests of inventory. Give specific examples of how these two typesof tests affect each other.arrow_forward
- How does an inventory error effect the financial statements?arrow_forwardHow is Inventory audited?arrow_forwardThe tests of controls for inventory records would include the following procedures.A. Existence.B. Rights.C. Completeness.D. Valuation.E. Presentation and disclosure.For each of the procedures, choose the letter of the correct PCAOB assertion(s). Only one letter per procedure should be used._______ 1. Trace a sample of sales invoices to perpetual inventory record entry of issue._______ 2. Select a sample of inventory item from perpetual records and vouch additions to receiving reports._______ 3. Select a sample of shipping documents and review the accounting summary of the quantities and prices._______ 4. Trace posting of sample of sales invoices to amounts in general ledger._______ 5. Review the appropriateness of standard costs to price inventory issues and cost of goods soldarrow_forward
- Which of the following is a substantive test in relation to completeness? a.Inspect physical inventory, checking from physical stock to inventory records. b.Enquire of management and scan inventory records to identify any obsolete, excess or slow-moving inventory. c.Inspect physical inventory, checking from inventory records to physical stock. d.Recalculate depreciation or depletion calculations.arrow_forwardWhat analytical procedures might reveal obsolete or slow-moving inventory?arrow_forwardWhich of the following is not an advantage of a perpetual inventory system? a. assits in the prevention of stockouts b. requires less data processing effort than periodic system c. maintains up-to-date inventory and cost of goods sold balances d. provides evidence of inventory shrinkagearrow_forward
- Identify whether each description best applies to a periodic or a perpetual inventory system. Requires an adjusting entry to record inventory shrinkage.arrow_forwardWhich of the following is not an advantage of a perpetual inventory system? a. Assists in the prevention of stockouts b. Requires less data processing effort than periodic systems c. Maintains up-to-date inventory and cost of goods sold balances d. Provides evidence of inventory shrinkagearrow_forward
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