AUDITING & ASSURANCE SERVICES CONNECT AC
10th Edition
ISBN: 9781259292057
Author: MESSIER
Publisher: MCG
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Chapter 5, Problem 5.17MCQ
To determine
Concept Introduction:Auditor provides his opinion on the basis of the conclusion drawn from the audit evidences obtained during the process of the audit. Some audit evidences are received from the third party and some from the management. Management representation letter is also a kind of the evidence for the auditor.
To choose: The procedure that an auditor would use to verify management’s assertion of completeness.
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Which of the following substantive audit procedures is most likely to be performed by the auditor to gather evidence in support of the balance per bank?
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Chapter 5 Solutions
AUDITING & ASSURANCE SERVICES CONNECT AC
Ch. 5 - Prob. 5.1RQCh. 5 - Prob. 5.2RQCh. 5 - Prob. 5.3RQCh. 5 - Prob. 5.4RQCh. 5 - Prob. 5.5RQCh. 5 - Prob. 5.6RQCh. 5 - Prob. 5.7RQCh. 5 - Prob. 5.8RQCh. 5 - Prob. 5.9RQCh. 5 - Prob. 5.10RQ
Ch. 5 - Prob. 5.11RQCh. 5 - Prob. 5.12RQCh. 5 - Prob. 5.13RQCh. 5 - Prob. 5.14RQCh. 5 - Prob. 5.15RQCh. 5 - Prob. 5.16RQCh. 5 - Prob. 5.17MCQCh. 5 - Prob. 5.18MCQCh. 5 - Prob. 5.19MCQCh. 5 - Prob. 5.20MCQCh. 5 - Prob. 5.21MCQCh. 5 - Prob. 5.22MCQCh. 5 - Prob. 5.23MCQCh. 5 - Prob. 5.24MCQCh. 5 - Prob. 5.25MCQCh. 5 - Prob. 5.26MCQCh. 5 - Prob. 5.27MCQCh. 5 - Prob. 5.28MCQCh. 5 - Prob. 5.29MCQCh. 5 - Prob. 5.30PCh. 5 - Prob. 5.31PCh. 5 - Prob. 5.32PCh. 5 - Prob. 5.33PCh. 5 - Prob. 5.34PCh. 5 - Prob. 5.35PCh. 5 - Prob. 5.36PCh. 5 - Prob. 5.37PCh. 5 - Prob. 5.38PCh. 5 - Prob. 5.39P
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- when auditing a client's year end cash balance, an auditor uses standard bank confirmations and performs tests on the clients year end bank reconciliations. These substantive procedures test which of the following assertions? a. understandability of presentation and classification b. cutoff c. completeness and valuation and allowance d. rights and obligations, and occurencearrow_forwardAn auditor is considering whether the amount of cash is accurately recorded on the financial statements. All of the following are appropriate engagement procedures for the objective except A. Examining bank reconciliations and confirming bank balances. B. Comparing cash receipt lists with the receipts journal and bank deposit slips. C. Adding totals of reconciliations and comparing with cash account balances. D. Verifying cutoff of receipts and disbursements.arrow_forwardWhat audit procedures would you use to determine that the cash balances actually exist at the balance sheet date? Is a bank statement provided by the client sufficient audit evidence?arrow_forward
- When auditing the cash account, the auditor traces the cash receipts, which are recorded on the cash receipt journal but not on the current period bank statement, to subsequent bank statements. Which of the following audit objectives are tested? A. Classification and cut-off B. Completeness and occurrence C. Occurrence and cut-off D. Completeness and cut-off E. Classification and occurrencearrow_forwardBank confirmations are critical to the cash audit. What information does the auditor obtain by sending bank confirmations? Explain the different types of bank confirmations and what assertions each type addresses. How do you determine which is the best bank confirmation type to use?arrow_forwardWhich of the following audit procedures is aimed most directly at testing the completeness assertion for accounts payable? Footing the list of accounts payable. Tracing shipping reports after year-end to related customer purchase orders and invoices. Examining underlying documentation for cash disbursements in the period after year-end. Tracing shipping reports issued on or before year-end to related customer purchase orders and invoices.arrow_forward
- Which audit claims will be met by the audit method of cash count and bank verification requests?arrow_forwardWhich among the following types of audit evidence can be considered the most reliable? a.Verbal reply from management that the accounts receivable are fairly presented. b.Sales invoice with alteration submitted to the audit team by the company that has weak internal control. c.Photocopy of the building insurance document. d.Confirmation of cash balance directly obtained by the audit team leader from the bank.arrow_forwardWhich of the following procedures would an auditor most likely perform to test controls relating to management's assertion about the completeness of cash receipts for cash sales at a retail outlet? O Inquire about employees' access to recorded but undeposited cash. O Compare the cash balance in the general ledger with the bank confirmation request. O Observe the consistency of the employees' use of cash registers and tapes. O Trace deposits in the cash receipts journal to the cash balance in the general ledger.arrow_forward
- Which type of evidence is considered more reliable and relevant by the auditor? accounts receivable confirmation O minutes from management meetings O internally generated evidence O copy of cash receiptarrow_forwardEvidence comes in various types and has different degrees of reliability. Below are some pairs of various types of evidence: A bank confirmation versus observation of the segregation of duties between cash receipts and recording payment in the accounts receivable subsidiary ledger. An auditor’s recalculation of depreciation versus examination of raw material requisitions. A bank statement included in the client’s records versus the client’s shipping documents. Required: For each pair, indicate which type of evidence is more reliable. Justify your choicesarrow_forwardWhich of the following control objectives would be least likely be considered by the internal auditors in drafting the audit procedures for bank accounts and banking arrangement activities under the Acquire-to-Retire process? To ensure that fund transfers and automated methods of effecting banking transactions are valid and verified, in the best interests of the organization, and authorized. A. To ensure that banking charges are effectively monitored and minimized. B. To ensure that all income from bank is recorded without delay. C.To ensure that all banking transactions are bona fide, accurate and authorized whenever necessary. D. To ensure that overdraft set facilities are authorized and correctly operated within the limits defined by management and the organization's bankers. E. To ensure that the potential for staff malpractice and fraud are minimized. F. To ensure that banking arrangements and facilities are sufficient, appropriate and adequate for the business.arrow_forward
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