Loose-leaf For Auditing & Assurance Services: A Systematic Approach
11th Edition
ISBN: 9781260687637
Author: William F Messier Jr, Steven M Glover Associate Professor, Douglas F Prawitt Associate Professor
Publisher: McGraw-Hill Education
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Question
Chapter 15, Problem 15.6RQ
To determine
Concept Introduction:The purchasing process is a part of internal control that allowed the audit to perform as per the guidelines of purchasing. The audit follows the rule of the purchasing process and ensures that all transaction recorded accordingly. The purchasing process included the guidelines of duties, delivery time, and prices to avoid the risks. A stock transaction is a part of the purchasing process that includes the process that occurs when the stock changes the ownership.
To discuss: The major segregations of duties that should maintain when the entity does not use sufficient personnel to perform the stock transaction.
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Students have asked these similar questions
A type of impropriety that is hard to find is cheating that comes from:a. More transaction presentationb. Transactions are not recordedc. Transactions are recorded on subsidiary companiesd. Receivables from related parties
Which of the following would assist an entity in cat and prevent fraud? a. Accounting reconciliations b. Segregation of duties c. All the options d. Performance reviews
Which is correct ?
Chapter 15 Solutions
Loose-leaf For Auditing & Assurance Services: A Systematic Approach
Ch. 15 - Prob. 15.1RQCh. 15 - Prob. 15.2RQCh. 15 - Prob. 15.3RQCh. 15 - Prob. 15.4RQCh. 15 - Prob. 15.5RQCh. 15 - Prob. 15.6RQCh. 15 - Prob. 15.7RQCh. 15 - Prob. 15.8RQCh. 15 - Prob. 15.9RQCh. 15 - Prob. 15.10RQ
Ch. 15 - Prob. 15.11MCQCh. 15 - Prob. 15.12MCQCh. 15 - Prob. 15.13MCQCh. 15 - Prob. 15.14MCQCh. 15 - Prob. 15.15MCQCh. 15 - Prob. 15.16MCQCh. 15 - Prob. 15.17MCQCh. 15 - Prob. 15.18MCQCh. 15 - Prob. 15.19MCQCh. 15 - Prob. 15.20MCQCh. 15 - Prob. 15.21PCh. 15 - Prob. 15.22PCh. 15 - Prob. 15.23PCh. 15 - Prob. 15.24P
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- Why should the responsibility for maintaining the accounting records be separated from the responsibility of operations? Be sure to explain: -Accounting records versus operations functions. -Does this differ in small vs large organizations? If so, how? And, how would a company still control for this difference.arrow_forwardAccording to the business entity concept, nonbusiness assets and liabilities are not included in the businesss accounting records.arrow_forwardInternal users of accounting information would not include _______________________. managers employees creditors officersarrow_forward
- The first step in solving an ethical dilemma is to identify the alternatives. weigh the impact of each alternative on various stakeholders. O recognize an ethical situation and the ethical issues involved. O identify and analyze the principal elements in the situation.arrow_forwardWhich of the following is not a purpose of internal controls? Guarantee profits Protect assets Adherence to company policies Make fraud more difficult Accurate accounting recordsarrow_forwardUsers who do not directly run the organization and have limited access to accounting information are called (internal/external) what type of users.arrow_forward
- Which of the following is NOT one of the purposes of internal control? a. to guarantee the success of the business b. to safeguard the entity’s assets and resources c. to deter errors, fraud, and theft d. to ensure the accuracy and completeness of the accounting dataarrow_forwardWhich of the following is not an element of internal control? A) Only promoting from within. B) Implement segregation of duties. C) Maintain adequate accounting records. D) Conduct internal audits.arrow_forwardWhich of the following circumstances may create intimidation threats? a) Threat of dismissal or replacement of the member, or a close or immediate family member, over a disagreement about the application of an accounting principle or the way in which financial information is to be reported b) Being responsible for the employing organisation’s financial reporting when an immediate or close family member employed by the entity makes decisions that affect the entity’s financial reporting c) A dominant personality attempting to influence the decision making process for example the application of an accounting principle. d) Participating in incentive compensation arrangements offered by the employing organisation Only a) and b) Only a) Only a) , b) and c) Only a) and c)arrow_forward
- What control system and subsidiary accounts should be included in Ermler & Trump’s manual accounting system? Why?arrow_forwardWhich one of the following is not an objective of a system of internal controls? Select one: 1. Overstate liabilities in order to be conservative 2. Enhance the accuracy and reliability of accounting records 3. Safeguard company assets 4. Reduce the risks of errorsarrow_forwardGive an example of how a CFO or Controller can fraudulently manipulate financial statements through the use of journal entries. Separately, give an example of a financial reporting practice that is subject to management estimates e.g. fair value measurements of assets, goodwill, transfer pricing - and discuss internal controls that can reduce the opportunities for unethical behavior.arrow_forward
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