Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets. To indicate: The effect of cash controls over the nature, timing and extent of the audit procedures.

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Answer 1

Question

Chapter 16, Problem 16.1RQ

To determine

Concept Introduction:

Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets.

To indicate: The effect of cash controls over the nature, timing and extent of the audit procedures.

Expert Solution & Answer

Explanation of Solution

Internal controls have direct relation with the misstatement in the financial statement. A good internal control system indicates lesser chance of misstatements and a weak internal control indicates higher chances of the material misstatements in the financial statements. The purpose of the audit is to find the material misstatement. Hence, the auditor should obtain the knowledge of the internal control before performing subtractive procedures.

Most of the business transactions involve cash payment/ receipt. Hence it is necessary for the auditor to check the controls over cash receipts and payments. Hence the auditor begins with test of control and checks the controls over the cash receipts and payments. Such test of control is preformed to check the existence and effective of the internal control systems and on the basis of results of test of control the auditor determines the nature, timing, and extent of the subtractive procedure.

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Answer 2

Question

Chapter 16, Problem 16.1RQ

To determine

Concept Introduction:

Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets.

To indicate: The effect of cash controls over the nature, timing and extent of the audit procedures.

Expert Solution & Answer

Explanation of Solution

Internal controls have direct relation with the misstatement in the financial statement. A good internal control system indicates lesser chance of misstatements and a weak internal control indicates higher chances of the material misstatements in the financial statements. The purpose of the audit is to find the material misstatement. Hence, the auditor should obtain the knowledge of the internal control before performing subtractive procedures.

Most of the business transactions involve cash payment/ receipt. Hence it is necessary for the auditor to check the controls over cash receipts and payments. Hence the auditor begins with test of control and checks the controls over the cash receipts and payments. Such test of control is preformed to check the existence and effective of the internal control systems and on the basis of results of test of control the auditor determines the nature, timing, and extent of the subtractive procedure.

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Answer 3

Question

Chapter 16, Problem 16.1RQ

To determine

Concept Introduction:

Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets.

To indicate: The effect of cash controls over the nature, timing and extent of the audit procedures.

Expert Solution & Answer

Explanation of Solution

Internal controls have direct relation with the misstatement in the financial statement. A good internal control system indicates lesser chance of misstatements and a weak internal control indicates higher chances of the material misstatements in the financial statements. The purpose of the audit is to find the material misstatement. Hence, the auditor should obtain the knowledge of the internal control before performing subtractive procedures.

Most of the business transactions involve cash payment/ receipt. Hence it is necessary for the auditor to check the controls over cash receipts and payments. Hence the auditor begins with test of control and checks the controls over the cash receipts and payments. Such test of control is preformed to check the existence and effective of the internal control systems and on the basis of results of test of control the auditor determines the nature, timing, and extent of the subtractive procedure.

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Answer 4

Question

Chapter 16, Problem 16.1RQ

To determine

Concept Introduction:

Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets.

To indicate: The effect of cash controls over the nature, timing and extent of the audit procedures.

Expert Solution & Answer

Explanation of Solution

Internal controls have direct relation with the misstatement in the financial statement. A good internal control system indicates lesser chance of misstatements and a weak internal control indicates higher chances of the material misstatements in the financial statements. The purpose of the audit is to find the material misstatement. Hence, the auditor should obtain the knowledge of the internal control before performing subtractive procedures.

Most of the business transactions involve cash payment/ receipt. Hence it is necessary for the auditor to check the controls over cash receipts and payments. Hence the auditor begins with test of control and checks the controls over the cash receipts and payments. Such test of control is preformed to check the existence and effective of the internal control systems and on the basis of results of test of control the auditor determines the nature, timing, and extent of the subtractive procedure.

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Answer 5

Chapter 16, Problem 16.1RQ

To determine

Concept Introduction:

Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets.

To indicate: The effect of cash controls over the nature, timing and extent of the audit procedures.

Expert Solution & Answer

Explanation of Solution

Internal controls have direct relation with the misstatement in the financial statement. A good internal control system indicates lesser chance of misstatements and a weak internal control indicates higher chances of the material misstatements in the financial statements. The purpose of the audit is to find the material misstatement. Hence, the auditor should obtain the knowledge of the internal control before performing subtractive procedures.

Most of the business transactions involve cash payment/ receipt. Hence it is necessary for the auditor to check the controls over cash receipts and payments. Hence the auditor begins with test of control and checks the controls over the cash receipts and payments. Such test of control is preformed to check the existence and effective of the internal control systems and on the basis of results of test of control the auditor determines the nature, timing, and extent of the subtractive procedure.

Answer 6

Chapter 16, Problem 16.1RQ

To determine

Concept Introduction:

Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets.

To indicate: The effect of cash controls over the nature, timing and extent of the audit procedures.

Expert Solution & Answer

Explanation of Solution

Internal controls have direct relation with the misstatement in the financial statement. A good internal control system indicates lesser chance of misstatements and a weak internal control indicates higher chances of the material misstatements in the financial statements. The purpose of the audit is to find the material misstatement. Hence, the auditor should obtain the knowledge of the internal control before performing subtractive procedures.

Most of the business transactions involve cash payment/ receipt. Hence it is necessary for the auditor to check the controls over cash receipts and payments. Hence the auditor begins with test of control and checks the controls over the cash receipts and payments. Such test of control is preformed to check the existence and effective of the internal control systems and on the basis of results of test of control the auditor determines the nature, timing, and extent of the subtractive procedure.

Answer 7

Chapter 16, Problem 16.1RQ

To determine

Concept Introduction:

Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets.

To indicate: The effect of cash controls over the nature, timing and extent of the audit procedures.

Answer 8

Expert Solution & Answer

Explanation of Solution

Internal controls have direct relation with the misstatement in the financial statement. A good internal control system indicates lesser chance of misstatements and a weak internal control indicates higher chances of the material misstatements in the financial statements. The purpose of the audit is to find the material misstatement. Hence, the auditor should obtain the knowledge of the internal control before performing subtractive procedures.

Most of the business transactions involve cash payment/ receipt. Hence it is necessary for the auditor to check the controls over cash receipts and payments. Hence the auditor begins with test of control and checks the controls over the cash receipts and payments. Such test of control is preformed to check the existence and effective of the internal control systems and on the basis of results of test of control the auditor determines the nature, timing, and extent of the subtractive procedure.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 16 - Prob. 16.1RQ Ch. 16 - Prob. 16.2RQ Ch. 16 - Prob. 16.3RQ Ch. 16 - Prob. 16.4RQ Ch. 16 - Prob. 16.5RQ Ch. 16 - Prob. 16.6RQ Ch. 16 - Prob. 16.7RQ Ch. 16 - Prob. 16.8RQ Ch. 16 - Prob. 16.9RQ Ch. 16 - Prob. 16.10RQ

Concept explainers

Explanation of Solution

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