Data Analytics For Accounting
19th Edition
ISBN: 9781260375190
Author: RICHARDSON, Vernon J., Teeter, Ryan, Terrell, Katie
Publisher: Mcgraw-hill Education,
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Question
Chapter 6, Problem 7P
To determine
Explain how artificial intelligence could be used for providing help in the evaluation of the estimated amount of the allowance for doubtful accounts. Identify whether past allowances could be observed for predicting the amount of allowances in the current period.
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Students have asked these similar questions
Why does balance of payments contain an account called statistical discrepancy?
When applying analytical procedures during an audit, which of the following is the best approach for developing expectations?
Multiple Choice
Considering the pattern of several unusual changes without trying to explain what caused them.
Considering unaudited account balances and ratios to calculate what adjusted balances should be.
Comparing client data with client determined expected results to reduce detailed tests of account balances.
Comparing current year account balances to balances of one or more comparable periods.
Which of the following is the maximum misstatement that can exist in an account before it is considered materially
misstated? Select answer from the options below Anticipated misstatement Projected misstatement Upper misstatement
limit Tolerable misstatement
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- How do bank confirmations differ from positive confirmations ofaccounts receivable? Distinguish between them in terms of the nature of the informationconfirmed, the sample size, and the appropriate action when the confirmation is notreturned after the second request. Explain the rationale for the differences between thesetwo types of confirmationsarrow_forwardWhy is it crucial to estimate the MARR correctly?arrow_forwardExplain why the analysis of differences is important in the confirmation of accounts receivable, even if the misstatements in the sample are not material.arrow_forward
- Can a updated check be an negotiable instrumentarrow_forwardAuditors 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.arrow_forwardWhich analytical procedures are most important in verifyingnotes payable? Which types of misstatements can the auditor uncover by the use ofthese tests?arrow_forward
- If the _______ is less than the _______, the audit team would conclude that the account balance is fairly stated.a. Projected misstatement; tolerable misstatement.b. Tolerable misstatement; projected misstatement.c. Upper limit on misstatements; tolerable misstatement.d. Tolerable misstatement; upper limit on misstatements.arrow_forwardAn auditor reviews aged accounts receivable to assess likelihood of collection to support management’s assertion about account balances of: Select one: a. rights and obligations b. existence. c. valuation and allocation d. completenessarrow_forwardA client uses percentages of aging categories to calculate the allowance for doubtful accounts. When auditing the allowance for doubtful accounts, the auditor must… Question 4 options: Ensure that the client’s aging categories are consistent with industry averages. Ensure that the client has calculated the allowance for the current and all prior years using the same percentages for uncollectible accounts. Perform tests to ensure that the aging categories are accurate. Perform tests to ensure that management has not exercised judgment when calculating the allowance for doubtful accounts.arrow_forward
- Which of the following statements is false regarding planning analytical procedures in the revenue cycle? a. As revenue is typically regarded as a high-risk account, planning analytical procedures related to revenue are not required. b. The first step in planning analytical procedures includes developing an expectation of recorded amounts or ratios, and evaluating whether that expectation is precise enough to accomplish the relevant objective. c. Trend analysis would not be appropriate as a plan-fling analytical procedure in the revenue cycle. d. All of the above statements are false.arrow_forwardWhat is the monetary threshold value, when a Statement of Advice (SOA) may be replaced by a Record of Advice (RoA)?arrow_forwardRates of returns on annuities cannot be calculated with a formula. True Falsearrow_forward
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