Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
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Textbook Question
Chapter 9, Problem 3CYBK
Which of the following statements is true regarding assertions in the revenue cycle?
a. It is typical that all five assertions for revenue are equally important.
b. If a client has an incentive to overstate revenues, the existence assertion would be more relevant than the completeness assertion.
c. Audit evidence about the existence of revenues is also the most appropriate evidence about the valuation of receivable.
d. The allowance for doubtful account has important implications for the ownership assertion of
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if 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 allocation
The allowance for doubtful accounts, which appears as a deduction from accounts receivable on a statement of financial position and which is based on an estimate of bad debts, is an application of which of the following?
a.
Revenue recognition principle.
b.
Materiality quality.
c.
Consistency characteristic.
d.
Expense recognition principle.
The allowance for doubtful accounts, which appears as a deduction from accounts receivable
on a statement of financial position and which is based on an estimate of bad debts, is an
application of which of the following?
a. Expense recognition principle.
b. Consistency characteristic.
c. Materiality quality.
O d. Revenue recognition principle.
Chapter 9 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
Ch. 9 - In the revenue cycle, the most significant...Ch. 9 - Which of the following statements is true...Ch. 9 - Prob. 4CYBKCh. 9 - Prob. 7CYBKCh. 9 - Prob. 8CYBKCh. 9 - Prob. 9CYBKCh. 9 - Prob. 10CYBKCh. 9 - Prob. 11CYBKCh. 9 - Prob. 12CYBKCh. 9 - Prob. 13CYBK
Ch. 9 - Prob. 14CYBKCh. 9 - Prob. 15CYBKCh. 9 - Prob. 16CYBKCh. 9 - Prob. 17CYBKCh. 9 - Prob. 18CYBKCh. 9 - Which of the following statements is false...Ch. 9 - Prob. 20CYBKCh. 9 - Prob. 22CYBKCh. 9 - Prob. 23CYBKCh. 9 - Prob. 24CYBKCh. 9 - Prob. 25CYBKCh. 9 - Prob. 26CYBKCh. 9 - Prob. 27CYBKCh. 9 - Prob. 28CYBKCh. 9 - Prob. 29CYBKCh. 9 - Prob. 30CYBKCh. 9 - Prob. 31CYBKCh. 9 - Prob. 32CYBKCh. 9 - Refer to Exhibit 9.1. Which accounts are relevant...Ch. 9 - Prob. 2RQSCCh. 9 - Prob. 3RQSCCh. 9 - An important task ¡n the audit of the revenue...Ch. 9 - Prob. 5RQSCCh. 9 - Prob. 6RQSCCh. 9 - Prob. 7RQSCCh. 9 - Prob. 8RQSCCh. 9 - Prob. 9RQSCCh. 9 - Prob. 10RQSCCh. 9 - Prob. 11RQSCCh. 9 - Prob. 12RQSCCh. 9 - Prob. 13RQSCCh. 9 - Prob. 14RQSCCh. 9 - Prob. 15RQSCCh. 9 - Stainless Steel Specialties (SSS) is a...Ch. 9 - Prob. 17RQSCCh. 9 - Prob. 18RQSCCh. 9 - Prob. 19RQSCCh. 9 - Prob. 20RQSCCh. 9 - Prob. 21RQSCCh. 9 - Prob. 22RQSCCh. 9 - Prob. 23RQSCCh. 9 - Prob. 24RQSCCh. 9 - Prob. 25RQSCCh. 9 - Prob. 26RQSCCh. 9 - Prob. 27RQSCCh. 9 - Prob. 28RQSCCh. 9 - Prob. 29RQSCCh. 9 - Prob. 30RQSCCh. 9 - Prob. 31RQSCCh. 9 - Prob. 32RQSCCh. 9 - Prob. 33RQSCCh. 9 - Prob. 34RQSCCh. 9 - Prob. 35RQSCCh. 9 - Prob. 36RQSCCh. 9 - Prob. 37RQSCCh. 9 - Prob. 38RQSCCh. 9 - Prob. 39RQSCCh. 9 - Read the following scenario about Strang...Ch. 9 - Prob. 41RQSCCh. 9 - Prob. 42RQSCCh. 9 - ZYNGA (LO Z 3, 4, 5, 6, 8) Refer to the Why It...Ch. 9 - UTSTARCOM, INC. (LO 2, 3, 4, 5, 6, 8) UTStarcom is...Ch. 9 - Prob. 47FFCh. 9 - Prob. 48FFCh. 9 - Prob. 55DAUA
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Why do auditors focus on revenue as a significant account and the occurrence of revenue as a relevant assertion in the revenue cycle?arrow_forwardIt is generally acceptable for analytical procedures to be the only audit procedure used to test revenue. Question 21 options: True Falsearrow_forwardGive an example of an error or fraud that would misstate financial statements to affect the accounts as follows, taking each case independently. (Note: “Overstate” means the account has a higher value than would be appropriate under GAAP and “understate” means it has a lower value.)a. Overstate one asset; understate another asset.b. Overstate an asset; overstate stockholders’ equity.c. Overstate an asset; overstate revenue.d. Overstate an asset; understate an expense.e. Overstate a liability; overstate an expense.f. Understate an asset; overstate an expense.g. Understate a liability; understate an expense.arrow_forward
- when the auditor want to assure that There are no unrecorded receivables. What assertion he or she want to test : Select one: a. Rights and obligations b. Valuation and allocation c. Completeness d. Existencearrow_forward3. An auditor should perform alternative procedures to substantiate the existence of accounts receivable when a. Pledging of the receivables is probable b. No reply to a negative confirmation request is received c. No reply to a positive confirmation request is received d. Collectibility of the receivable sis in doubtarrow_forwardwhich of the following regarding errors is not correct Select one: a. unintentional misstatement of the financial statements, b. mistake in recording the date of a sale invoice is error c. it is easier for the auditor to detect because it is not intentional d. Fraudulent Financial Reporting is kind of errorarrow_forward
- If the auditor concludes that there is a high likelihood of material misstatement in accounts receivable due to changing economic conditions, the auditor concludes that inherent risk for accounts receivab is low. Select one: OTrue O False earrow_forwardQuestion 18 Which of the following statements is true regarding assertions in the revenue cycle? All five assertions presented are equally important Under normal audit risk conditions the occurrence assertion would be more relevant than the completeness assertion Audit evidence about the existence of revenues is also the most appropriate evidence about the valuation of accounts receivable The allowance for uncollectible accounts has important implications for the ownership assertion for accounts receivablearrow_forwardWhat are the most common revenue-recognition abuses identified by auditors?arrow_forward
- When an event impacts a financial statement element, it should be recognized in the accounting records even if reliability of the amount is questionable. True Falsearrow_forwardWhat is the process of confirming accounts receivable balances. Why is it important for auditors to understand revenue recognition rules?arrow_forwardWhy are the confirmation of payables is not a required audit procedure as it is with receivables?arrow_forward
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