EBK AUDITING & ASSURANCE SERVICES: A SY
10th Edition
ISBN: 9781259293245
Author: Jr
Publisher: MCGRAW HILL BOOK COMPANY
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Chapter 7, Problem 7.34P
To determine
Introduction:Accounting controls are the ways that associate entity for validity and accuracy of the financial statements, however, these accounting controls are considerably helpful for compliance and as a safeguard for the corporate and to adjust to the laws, rules, and regulations.
The nature, timings, and extent of testing of the control designs and operating effectiveness.
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The following are two specific audit objectives in the audit of accounts payable. The list referred to is the list of accounts payable taken from the accounts payable subsidiary record. The total amount in the list agrees with the accounts payable balance in the general ledger. Which of these two audit objectives validates the management assertion of existence, and which one applies to completeness?
Group of answer choices
1. All accounts payable included in the list represent amounts due to valid vendors.
a. existence
b. occurrence
2. There are no unrecorded accounts payable.
a. existence
b. occurrence
Below are five audit procedures, all of which are tests of transactions associated with the audit of the acquisition and payment cycle. Also below are the six general transaction-related audit objectives and the five management assertions. For each audit procedure, indicate (1) its audit objective, and (2) the management assertion being tested.
Audit Objectives:
A. Occurrence
B. Completeness
C. Accuracy
D. Posting and Summarization
E. Classification
F. Timing
Management Assertions:
V. Occurrence
W. Completeness
X. Accuracy
Y. Classification
Z. Cutoff
Audit Procedures
1. Foot the purchases journal and trace the totals to the related general ledger accounts. __________________ ______________________
2. Recompute the cash discounts taken by the client. _____________________ _________________________
3. Compare dates on cancelled checks with the bank cancellation date. _________________ __________________________
4. Trace from a sample of cancelled checks to the…
An audit strategy sets the direction, timing, and scope of an audit. Based on your audit knowledge, which of the following would be included in the audit strategy document?
Select one:a. A flowchart of the entity's internal control system.b. The decision as to the combination of substantive testing and tests of control that would be adopted.c. The number of sales transactions to be tested.d. The results of the interim testing of payroll.
Chapter 7 Solutions
EBK AUDITING & ASSURANCE SERVICES: A SY
Ch. 7 - Prob. 7.1RQCh. 7 - Prob. 7.2RQCh. 7 - Prob. 7.3RQCh. 7 - Prob. 7.4RQCh. 7 - Prob. 7.5RQCh. 7 - Prob. 7.6RQCh. 7 - Prob. 7.7RQCh. 7 - Prob. 7.8RQCh. 7 - Prob. 7.9RQCh. 7 - Prob. 7.10RQ
Ch. 7 - Prob. 7.11RQCh. 7 - Prob. 7.12RQCh. 7 - Prob. 7.13RQCh. 7 - Prob. 7.14RQCh. 7 - Prob. 7.15RQCh. 7 - Prob. 7.16RQCh. 7 - Prob. 7.17RQCh. 7 - Prob. 7.18RQCh. 7 - Prob. 7.19MCQCh. 7 - Prob. 7.20MCQCh. 7 - Prob. 7.21MCQCh. 7 - Prob. 7.22MCQCh. 7 - Prob. 7.23MCQCh. 7 - Prob. 7.24MCQCh. 7 - Prob. 7.25MCQCh. 7 - Prob. 7.26MCQCh. 7 - Prob. 7.27MCQCh. 7 - Prob. 7.28MCQCh. 7 - Prob. 7.29MCQCh. 7 - Prob. 7.30MCQCh. 7 - Prob. 7.31MCQCh. 7 - Prob. 7.32MCQCh. 7 - Prob. 7.33MCQCh. 7 - Prob. 7.34PCh. 7 - Prob. 7.35PCh. 7 - Prob. 7.36PCh. 7 - Prob. 7.37PCh. 7 - Prob. 7.38PCh. 7 - Prob. 7.39PCh. 7 - Prob. 7.40PCh. 7 - Prob. 7.41PCh. 7 - Prob. 7.42PCh. 7 - Prob. 7.43PCh. 7 - Prob. 7.44PCh. 7 - Prob. 7.45P
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
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- An auditor will most likely review an entity’s periodic accounting for the numerical sequence of shipping documents to ensure all documents are included to support management’s assertion about classes of transactions of: Select one: a. occurrence. b. completeness c. classification. d. accuracyarrow_forwardYou are working on the audit of Frozen Fresh Ltd and have just completed an evaluation of controls in the sales receivable, and receipt area. You note the following key controls as part of your evaluation a all sales handled were supported by shipping documents. b. All sales once shipped have been invoiced and recorded in the accounting records. C) invoices have been recorded correctly. Required: For each of the controls (a to c) 1. Identity the assertion addressed by the control 2. Provide one common control policies and procedures in the organisation to address the assertions 3. Provide one procedure that could be used to test the control for the key control identifiedarrow_forwardIn reviewing the processes, procedures, and internal controls of one of your audit clients, VeronicaCorporation, you notice the following practices in place. Veronica has recently installed a new electronicdata processing (EDP) system that affects the accounts receivable, billing, and shipping records. Thecompany identified a computer operator who is permanently assigned to each of the functions ofaccounts receivable, billing, and shipping. Each of these computer operators is given the responsibilityof running the program for transaction processing, making program changes, and reconciling thecomputer log. To prevent an operator from having exclusive access to the tapes and documentation,the computer operators randomly rotate the custody and control tasks every two (2) weeks over themagnetic tapes and the system documentation. Access controls to the computer room consist ofmagnetic cards and a digital code for each operator. Moreover, the system analyst and the computeroperation…arrow_forward
- The following are specific balance-related audit objectives applied to the audit of accounts receivable (a. through i.) and management assertions about account balances (1 through 6). The list referred to in the specific balance-related audit objectives is the list of the accounts receivable from each customer at the balance sheet date. i (Click the icon to view the audit objectives.) i (Click the icon to view the management assertions.) Requirement For each specific balance-related audit objective, identify the appropriate management assertion. (Hint: See table.) Specific balance-related audit objective There are no unrecorded receivables. b. Uncollectible accounts have been provided for. C. Receivables that have become uncollectible have been written off. d. All accounts on the list are expected to be collected within 1 year. The total of the amounts on the accounts receivable listing agrees with the general ledger balance for accounts receivable. a. e. Management assertionarrow_forwardWhich of the following is a device designed to help the audit team obtain evidence about theaccounting and control activities of an audit client?a. A narrative memorandum describing the control system.b. An internal control questionnaire.c. A flowchart of the documents and procedures used by the company.d. All of the abovearrow_forwardq1. M&S CPA Firm identify the below control transactions relate to the integrated audit of XYZ Company "All computers have identification plates that are listed in a control account." determine which cycle the control most likely relates to. Select one: а. Payroll and Personnel Cycle b. Expenditure Cycle c. Property Plant and Equipment Cycle d. Revenue Cyclearrow_forward
- Internal controls do each of the following except: A. Evaluate performance of employees B. Guarantee the accuracy if account records C. Protect assets D. Increase the likelihood that any errors will be caughtarrow_forwardAuditors identify and assess the risk of material misstatement at these two levels Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Financial Statement level and Information Process Goals level b Financial statement level and Operations Process Goals level c Information Process Goals level and Operations process goals level d Financial Statement Level and Relevant Assertion Levelarrow_forwardComprehensive Problems (covers all content) Problem 11: List the Summary of the Audit Process in correct phases (from beginning to end of audit): Perform analytical procedures and tests of details of balances Complete the audit and issue and audit report Plan and design an audit approach Perform tests of controls and substantive tests of transactions Phase 1 ______ Phase 2 ________ Phase 3 ________ Phase 4 ________ Give an example of each step.arrow_forward
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