Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 19, Problem 15.1MCQ
To determine
Identify the question that an auditor least likely to include on an internal control questionnaire concerning the initiation and execution of equipment transactions.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Which of the following management assertion is the most suitable assertion for “inspecting invoices to determine if the services provided by an electrical contractor are repairs or improvements to the client’s offices” evidence: Select one: a. Accuracy or valuation and allocation b. Occurrence or existence c. Cut-off d. Completeness
Which of the following controls will most likely justify a reduced assessed level ofcontrol risk for the existence assertion related to the equipment account?(1) As purchases of equipment are recorded in the purchases journal, the systemautomatically posts the item to the equipment master file.(2) Internal auditors physically examine equipment on a periodic basis and verifythat the equipment is included in the equipment master file.(3) All additions to the equipment account must be supported by a valid receivingreport.(4) Assignment of general ledger account coding is reviewed by the accounts payablesupervisor as purchases are recorded in the purchases journal.
19.
Which of the following would be least likely to address control over the initiation and execution of equipment transactions?
Group of answer choices
Requests for purchases of equipment are reviewed for consideration of soliciting competitive bids
Procedures exist to restrict access to equipment
Requests for major repairs are approved by a higher level than the department initiating the request
Prenumbered purchase orders are used for equipment and periodically accounted for
Chapter 19 Solutions
Auditing And Assurance Services
Ch. 19 - Identify three asset accounts, three expense...Ch. 19 - Explain the relationship between substantive tests...Ch. 19 - Prob. 3RQCh. 19 - Prob. 4RQCh. 19 - Prob. 5RQCh. 19 - Prob. 6RQCh. 19 - Prob. 7RQCh. 19 - Prob. 8RQCh. 19 - Prob. 9RQCh. 19 - Prob. 10RQ
Ch. 19 - Which documents will be used to verify accrued...Ch. 19 - Prob. 12RQCh. 19 - Prob. 13RQCh. 19 - Prob. 14RQCh. 19 - Prob. 15.1MCQCh. 19 - Prob. 15.2MCQCh. 19 - Prob. 15.3MCQCh. 19 - Prob. 16.1MCQCh. 19 - Prob. 16.2MCQCh. 19 - Prob. 16.3MCQCh. 19 - Prob. 17.1MCQCh. 19 - Prob. 17.2MCQCh. 19 - Prob. 17.3MCQCh. 19 - Prob. 18.1MCQCh. 19 - Prob. 18.2MCQCh. 19 - Prob. 18.3MCQCh. 19 - Prob. 19DQPCh. 19 - Prob. 20DQPCh. 19 - Prob. 21DQPCh. 19 - Prob. 22DQPCh. 19 - Prob. 24DQPCh. 19 - Prob. 25DQPCh. 19 - You are auditing the financial statements of...Ch. 19 - Prob. 27DQPCh. 19 - Prob. 28DQPCh. 19 - Prob. 29DQP
Knowledge Booster
Similar questions
- Which of the following controls will most likely justify a reduced assessed level ofcontrol risk for the existence assertion for equipment?(1) Internal auditors periodically select equipment items in the fixed assets masterfile and locate the related equipment on company premises.(2) Department heads are asked to provide information to the accounting department each quarter about any equipment no longer in use or somewhat damaged.(3) All contracts of equipment purchases are reviewed by both the controller andattorney to verify that legal title transfers to the client and that none representoperating leases.(4) As part of quarterly and annual inventory physical counts, factory equipment islisted and subsequently reconciled to the fixed asset master file.arrow_forwardThe following are typical questions that might appear on an internal control questionnaire relating to plant and equipment: Has a dollar minimum been established for expenditures to be capitalized? Are subsidiary ledgers for plant and equipment regularly reconciled with general ledger controlling accounts? Assuming that the operating effectiveness of each of the above procedures is found to be inadequate, describe how the auditors might alter their substantive procedures to compensate for the increased level of risks of material misstatements.arrow_forwardexplain. If, after obtaining an initial understanding of a client's internal control, the auditor wishes to further reduce the assessed level of control risk relating to plant asset transactions, the auditor should next Make extensive substantive tests of plant asset balances. Establish the physical existence of current year additions. Complete the plant asset section of the internal accounting control questionnaire. Further test those internal control procedures relating to processing and recording plant asset transactions.arrow_forward
- Which of the following expressions best describes a situation under which the issuance of a report that concludes on the condition of the internal controls of an organization that provides technological services to one of our audit clients (SOC report) is required? It is that situation in which a CPA has been hired to evaluate a. the projected financial statements prepared by the client, to see if the expected results comply with hypothetical assumptions or not. b. the information systems and technologies subcontracted by the client, specifically in what corresponds to criteria of security, availability, integrity, confidentiality and privacy. c. any assertion or area that the client has asked to intervene (subject matter), and do so in accordance with compliance or not, with criteria or principles (against criteria). d. services that help the client maintain their financial independence.arrow_forwardAn auditor is likely to use procedures to support the operating effectiveness of internal controls. Which of the following would generally not be used ? Select one : O a. Re -perform client procedures O b. Examine documents , records, and reports O c. Make inquiries of appropriate client personnel O d. Analytical proceduresarrow_forwardWhat types of audit procedures are typically performed in testing operating effectiveness of controls over the revenue and collection cycle?arrow_forward
- Which of the following audit techniques ordinarily would provide an auditor with the least assurance about the operating effectiveness of an internal control activity? a. Inquiry of client personnel. b. Inspection of documents and reports. c. Observation of client personnel. d. Preparation of system flowcharts.arrow_forwardBased on the information in scenario C, classify the information (1-8) according to the elements of an audit finding (criteria, condition,cause, effect and recommendations)arrow_forwardIn order to help the audit team assigned to the audit of a major client's property, plant and equipment accounts better understand the link between auditing assertions and this area of the audit, the audit manager with overall responsibility for this part of the audit has convened a meeting. Which of the choices below would be the supervisor's best response to help explain this relationship? The easiest way to understand this relationship is to imagine taking our list of assertions, determining which ones apply to the client's property, plant and equipment accounts, and then finding ways to test the assertions we selected. For example, we might decide to test the valuation and allocation assertion by examining documents to see if the client has defaulted on any debt associated with these assets. The easiest way to understand this relationship is to imagine taking our list of assertions, determining which ones apply to the client's property, plant and equipment accounts, and then…arrow_forward
- Which of the following is not a scope of internal auditors? Efficient Use of Resources Should work independently Compliance with Policies and Procedures Safeguarding the Assetsarrow_forwardFor each of the following misstatements in property, plant, andequipment accounts, state an internal control that the client can implement to preventthe misstatement from occurring and a substantive audit procedure that the auditor canuse to discover the misstatement:1. Computer equipment that is abandoned or traded for replacement equipment isnot removed from the accounting records.2. Depreciation expense for manufacturing operations is charged to administrativeexpenses.3. The asset lives used to depreciate equipment are less than reasonable, expected useful lives.4. Capitalizable assets are routinely expensed as repairs and maintenance, perishabletools, or supplies expense.5. Acquisitions of property are recorded at incorrect amounts.6. A loan against existing equipment is not recorded in the accounting records. Thecash receipts from the loan never reached the company because they were used forthe down payment on a piece of equipment now being used as an operating asset. Theequipment…arrow_forwardWhich of the following is not a common procedure for assessing operating effectiveness of preventive controls? a. Observation of personnel b. Analysis of trends or ratios c. Inspection of documents d. Inquiries of managementarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub