Financial Accounting-w/cd-package
3rd Edition
ISBN: 9780131060876
Author: REIMERS
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 21Q
To determine
Out of given controls, identify preventive, detective, and corrective controls.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following are examples of audit procedures:
Watch employees count inventory to determine whether company procedures are being followed.
Count a sample of inventory items and record the amount in the audit files.
Calculate the ratio of sales commission expense to sales as a test of sales commissions.
Review the accounts receivable with the credit manager to evaluate their collectability.
Compare a duplicate sales invoice with the sales journal for customer name and amount.
Obtain a written statement from a bank stating that the client has $15,671 on deposit and liabilities of $500,000 on a demand note.
Add the sales journal entries to determine whether they were correctly totaled.
Obtain a letter from the client’s attorney addressed to the CPA firm stating that the attorney is not aware of any existing lawsuits.
Extend the cost of inventory times the quantity on an inventory listing to test whether it is accurate.
Obtain a letter from an…
Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities? *A. Scan the cash disbursements entries recorded just before year end for indications of unusual transactions.B. Compare a sample of purchase orders issued just after year end with the year-end accounts payable trial balance.C. Obtain a copy of the receiving report until year end and its related sales invoice and trace them to the purchases journal.D. Compare the entries recorded in the purchases journal and the cash disbursements journal just before year end.
Read the following statements carefully:
Recalculate the allowance of accounts receivables.
Vouch sales journal entries to sales invoices.
Inspect the Bank statement in the client’s file.
Trace sales invoices to accounting receivable ledger.
Ask the payroll department to make a report about the calculating criteria of the overtime.
Inspect the disclosure of inventories in the financial statements.
Ask management about inventories the client has a legal title on it.
Observe that Inventory quantities include all products, materials, and supplies on hand.
Instructions:
1-Indicate the type of Procedure for each statement.
2-Indicate the type of Evidence for each statement.
3-Indicate the type of Assertion for each statement.
4-Indicate the source of Document for each statement (obtained directly by the auditor, external circulated internally, internally circulated externally, entirely internal).
No.
Type of Procedure
Type of Evidence
Type of Assertion
The source of…
Chapter 2 Solutions
Financial Accounting-w/cd-package
Ch. 2 - Prob. 1YTCh. 2 - Prob. 2YTCh. 2 - Is prepaid insurance an expense or an asset?...Ch. 2 - Prob. 4YTCh. 2 - Give an example of the matching principle from the...Ch. 2 - What is the difference between cash basis and...Ch. 2 - Prob. 7YTCh. 2 - What is GAAP? What is IFRS?Ch. 2 - Prob. 2QCh. 2 - Prob. 3Q
Ch. 2 - Prob. 4QCh. 2 - Prob. 5QCh. 2 - What are the four basic financial statements?Ch. 2 - Which financial statement pertains to a single...Ch. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10QCh. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - What does recognize revenue mean in accounting?Ch. 2 - Prob. 14QCh. 2 - What is an accrual? What is a deferral?Ch. 2 - Must a company collect the money from a sale...Ch. 2 - What is the cost of goods sold?Ch. 2 - Explain the difference between cash basis...Ch. 2 - Prob. 19QCh. 2 - Prob. 20QCh. 2 - Prob. 21QCh. 2 - Prob. 1MCQCh. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Prob. 6MCQCh. 2 - Prob. 7MCQCh. 2 - Prob. 8MCQCh. 2 - Prob. 9MCQCh. 2 - Prob. 10MCQCh. 2 - Elements of the financial statements. (LO 3). For...Ch. 2 - Prob. 2SEACh. 2 - Prob. 3SEACh. 2 - Prob. 4SEACh. 2 - Prob. 5SEACh. 2 - Prob. 6SEACh. 2 - Cash versus credit sales. (LO 3, 4). Company A had...Ch. 2 - Prob. 8SEACh. 2 - Prob. 9SEACh. 2 - Prob. 10SEACh. 2 - Prob. 11SEBCh. 2 - Prob. 12SEBCh. 2 - Prob. 13SEBCh. 2 - Prob. 14SEBCh. 2 - Prob. 15SEBCh. 2 - Prob. 16SEBCh. 2 - Prob. 17SEBCh. 2 - Prob. 18SEBCh. 2 - Prob. 19SEBCh. 2 - Prob. 20SEBCh. 2 - Prob. 21EACh. 2 - Prob. 22EACh. 2 - Prob. 23EACh. 2 - Balance sheet and income statement transactions....Ch. 2 - Prob. 25EACh. 2 - Prob. 26EACh. 2 - Prob. 27EACh. 2 - Prob. 28EACh. 2 - Elements of the financial statements. (LO 3). The...Ch. 2 - Prob. 30EBCh. 2 - Elements of the financial statements. (LO 3)....Ch. 2 - Prob. 32EBCh. 2 - Prob. 33EBCh. 2 - Prob. 34EBCh. 2 - Prob. 35EBCh. 2 - Current ratio. (LO 5). The following data was...Ch. 2 - Prob. 37PACh. 2 - Prob. 38PACh. 2 - Prob. 39PACh. 2 - Prob. 40PACh. 2 - Prob. 41PACh. 2 - Prob. 42PBCh. 2 - Prob. 43PBCh. 2 - Prob. 44PBCh. 2 - Prob. 45PBCh. 2 - Prob. 46PBCh. 2 - Prob. 1FSACh. 2 - Prob. 2FSACh. 2 - Prob. 3FSA
Knowledge Booster
Similar questions
- You are working as an Accounts Receivable Officer in Super Mart Store. Your Store manager asked you to make a data flow context diagram of the following transaction: A customer made a payment on account of purchases made last month. The customer payment was processed by receipt department and deposited in the bank. The remittance advice is forwarded to Account receivable department of updating of record. The credit manager is informed about the receivable information from the customerarrow_forwardYou are the auditor for Office Supply, which is opening a new location next week. The store manager has established all the controls you recommended for ensuring that sales are recorded properly, and cash is accounted for. The manager has heard from other locations that employees often used returned goods as a means of skimming money from the register. Choose one of the following questions to discuss: How might an employee use returned goods to skim money from the register? What controls would you recommend to prevent or detect fraudulent returns? What audit procedures might you perform to detect fraudulent returns?arrow_forwardCAATs Application—Receivables Confirmation. You are using computer audit software to prepare accounts receivable confirmations during the annual audit of the Eastern Sunrise Services Club. The company has the following data files:Master file—debtor credit record.Master file—debtor name and address.Master file—account detail:Ledger number.Sales code.Customer account number.Date of last billing.Balance (gross).Discount available to customer (memo account only).Date of last purchase.The discount field represents the amount of discount available to the customer if the customer pays within 30 days of the invoicing date. The discount field is cleared for expired amounts during the daily updating. You have determined that this is properly executed.Required:From the data files shown, list the information that you would include on the confirmation requests. Identify the file from which the information can be obtained.arrow_forward
- When a sample of customer accounts receivable is selected for vouching debits, auditors will vouch them toa. Sales invoices with shipping documents and customer sales invoices.b. Records of accounts receivable write-offs.c. Cash remittance lists and bank deposit slips.d. Credit files and reports.arrow_forwardThe following procedures were recently installed by Raspberry Creek Company:a. After necessary approvals have been obtained for the payment of a voucher, the treasurer signs and mails the check. The treasurer then stamps the voucher and supporting documentation as paid and returns the voucher and supporting documentation to the accounts payable clerk for filing.b. The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the supporting documentation is forwarded to the treasurer’s office for approval.c. Along with petty cash expense receipts for postage, office supplies, etc., several postdated employee checks are in the petty cash fund.d. At the end of the day, cash register clerks are required to use their own funds to make up any cash shortages in their registers.e. At the end of each day, all cash receipts are placed in the bank’s night depository.f. At the end of each day, an accounting clerk compares the duplicate copy of the daily cash deposit…arrow_forwardThe following are typical questions that might appear on an internal control questionnaire for accounts payable. 1. Are monthly statements from vendors reconciled with the accounts payable listing? 2. Are vendors’ invoices matched with receiving reports before they are approved for payment? Describe the manner in which each of the above procedures might be tested.arrow_forward
- i need the answer quicklyarrow_forwardUpon receipt of customers’ checks in the mail room, a responsible employee should prepare a remittance list that is forwarded to the cashier. A copy of the list should be sent to thea. Internal auditor to investigate the list for unusual transactions.b. Treasurer to compare the list with the monthly bank statement.c. Accounts receivable bookkeeper to update the subsidiary accounts receivable records.d. Entity’s bank to compare the list with the cashier’s deposit slip.arrow_forwardThe auditor of Ferguson’s, Inc., identified two internal controlsin the sales and collection cycle for testing. In the first control, the computer verifiesthat a planned sale on account will not exceed the customer’s credit limit entered inthe accounts receivable master file. In the second control, the accounts receivable clerkmatches bills of lading, sales invoices, and customer orders before recording in thesales journal. Describe how the presence of general controls over software programsand master file changes affects the extent of audit testing of each of these two internalcontrols.arrow_forward
- Please answer exercise 4-1. Thank you!arrow_forwardTrue or False 1. The revenue cycle considered by auditors includes the sales process but not cash collections. 2. The revenue cycle involves the procedures in generating a sales order, shipping the products, recording the transaction and collecting the receivable. 3. The shipping department confirms the shipment of goods by completing the packing slip and returning it to the purchasing department. 4. Monthly statements provide a detailed list of the customer’s activity for the previous month and a listing of all open items. 5. Invoices are processed, including their mailing to customers, only subsequent to proof of valid delivery to customers. 6. The use of prenumbered sales invoices is the primary control procedure to satisfy the assertion of completeness. 7. A comprehensive chart of accounts and a review of complex or unusual transactions by supervisory personnel are control procedures necessary for proper classification of accounts 8. Formal procedures for approving…arrow_forwardTo determine whether accounts payable are complete, auditors perform a test to verify that all merchandise received has been recorded. The population for this test consists of all Multiple Choice A. Receiving reports. B. Purchase orders. C. Canceled checks. D. Vendors’ invoices.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher: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
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
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