AUDITING & ASSURANCE SERVICES CONNECT AC
10th Edition
ISBN: 9781259292057
Author: MESSIER
Publisher: MCG
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Question
Chapter 5, Problem 5.23MCQ
To determine
Concept Introduction:
External confirmation is kind of audit evidence. This is obtained by the auditors from third party to confirm the balances or transactions. An external confirmation can be either positive or negative confirmation. .
To choose: The item for which auditor would be least likely to use conformation.
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Students have asked these similar questions
Which of the following procedures would most likely help an auditor identify events after the date of the financial statements that should be disclosed?
A.Review changes in the interest rate for cash accounts.
B.Follow up on accounts receivable confirmations that were not returned for additional loss accruals.
C.Inquire about changes in capital stock that was issued or repurchased.
D.Evaluate depreciation schedules for additional depreciation expense.
Auditors try to identify predictable relationships when using analytical procedures.
Relationships involving transactions from which of the following accounts would most
likely yield the highest level of evidence?
a. Accounts receivable.
O b. Interest expense.
O c. Travel and entertainment expense.
O d. Accounts payable.
An auditor's techniques for examining the balance sheet's accounts receivable account are most likely to concentrate on management's claim of
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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Similar questions
- Professional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.arrow_forwardAuditors try to identify predictable relationships when using analytical procedures. Relationshiipss involvingtransactions fromwhich of the following accounts most likely would yield the highest level of evidence? a. accounts receivable b. interest expense c. accounts payable d. Travel and entertainment expensearrow_forwardif the auditor want to assure that Receivables have not been sold. What assertion he or she want to test : Select one: a. Existence b. Completeness c. Rights and obligations d. Valuation and allocationarrow_forward
- Define and give examples of off-balance-sheet information. Why should auditors be concerned with such items?arrow_forwardWhich of the following audit procedures is least appropriate for addressing the assertion of valuation of liabilities? a. Confirm with creditors b. Test for unrecorded liabilities. c. Perform analytical procedures. d. Verify accounts payable trial balancearrow_forwardAn auditor must identify the relevant assertions about each significant financial statement account and disclosure and then gather evidence to conclude whether a material misstatement exists for each assertion. The nature of each financial statement account and disclosure contributes to the likelihood that a material misstatement exists.a. In general, which accounts are most susceptible to overstatement? To understatement?b. Why do you think a company could permit asset accounts to be understated?c. Why do you think a company could permit liability accounts to be overstated?d. Which direction of misstatement is most likely: income overstatement or income understatement?arrow_forward
- How could auditors have discovered the off-balance-sheet financing described in the Off-Balance-Sheet Inventory Financing case?arrow_forwardIn the Off-Balance-Sheet Inventory Financing instance, how may auditors have identified the off-balance-sheet financing?arrow_forwardBefore expressing an opinion concerning the audit of income and expenses, theauditor will best proceed with the audit of the income statement by(1) applying a rigid measurement standard designed to test for understatement ofnet income.(2) analyzing the beginning and ending balance sheet inventory amounts.(3) making net income comparisons to published industry trends and ratios.(4) auditing income statement accounts concurrently with the related balance sheetaccountsarrow_forward
- Which of the following types of audit evidence can be considered the least reliable? a.Purchase order forms with significant alterations. b.Physical counts of inventory observed by the auditor. c.Bank statements obtained from the client company's bank. d.Correspondence from the client's attorney about litigationarrow_forwardDuring an audit of an entity’s stockholders’ equity accounts, the auditor determines whether there are restrictions on retained earnings resulting from loans, agreements, or state law. This audit procedure most likely is intended to verify management’s assertion ofa. Existence or occurrence.b. Completeness.c. Valuation or allocation.d. Presentation and disclosure.arrow_forwardList two examples of audit evidence the auditor can use in supportof each of the following:a. Recorded amount of entries in the acquisitions journalb. Physical existence of inventoryc. Accuracy of accounts receivabled. Ownership of fixed assetse. Liability for accounts payablef. Obsolescence of inventoryg. Existence of petty casharrow_forward
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