All Matches

Solution Library

Expert Answer

Textbooks

Search Textbook questions, tutors and Books

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Tutors
Study Help
Hire a Tutor
AI Study Help New

Search
Sign In
Register

study help
business
auditing

Questions and Answers of Auditing

What is meant by haphazard sample selection? Can it be used for statistical sampling? Explain why or why not.
An auditor audited a random sample of 60 cash disbursements and found one improperly authorized disbursement (error).The achieved upper limit of control failures is 7.7% at a 5% risk of assessing
In any sampling application, why is it important to project the sample results to the population before drawing a conclusion about the population?
Why is it so important to specify the audit objective when planning a sample to test an account balance?
Describe the steps needed to plan a sample to test an account balance.
Define the following:a. Misstatementb. Populationc. Tolerable misstatementd. Test of Details (TD) risk
Why is it important to project sample results to the population?
When using non-statistical sampling, how does the auditor:a. Determine the sample sizeb. Select the samplec. Evaluate the sample results
What information is needed to design a PPS sample? Where does the auditor gather such information?
Explain the relationship between planning materiality and tolerable misstatement when using PPS sampling.
Explain how the probability of selecting an item is proportional to its size in PPS sampling.
What is OSPR? How does the auditor measure or estimate it?
All else being equal, what is the effect on a PPS sample size of an increase in the:a. Tolerable misstatementb. Expected misstatementc. Allowable TD riskd. Population
What alternatives are available to the auditor when a population contains a few items with negative balances, such as credit balances in accounts receivable, and the auditor wishes to utilize PPS
Would an item with a zero balance be included in a PPS sample? If not, what is the effect of not including the item in the sample?
What is basic precision, and how is it determined?
What is the upper misstatement limit (UML), and how is it determined?
Why is it important to determine whether the difference between the customer's balance shown in the client's records and the amount confirmed by the customer is the client's error or fraud, the
What alternative courses of actions might an auditor take if the UML exceeds tolerable misstatement in PPS sampling? Are these possible actions any different than those available when using
Multiple Choice Questions1. Which of the following represents sampling risk?a. Improperly assessing the risk of material misstatementb. Testing the wrong population to achieve the audit objectivec.
Requireda. The risk of assessing control risk too low is 10%. Determine the sample size for each of the following controls:b. Explain why the sample sizes for controls 2 and 3 are different from
a. When evaluating an attribute estimation sample, why is the focus on the upper limit rather than on the failure rate in the sample?b. If the achieved upper limit of control failures exceeds the
The auditor designed an audit procedure to test the following control procedures in the revenue cycle of a company that makes large factory equipment:1. Credit approval2. Sale price taken from
Avation is a public company and, therefore, the auditor is required to test controls and issue an opinion on the effectiveness of the client's controls as well as the fairness of the financial
You are using attribute estimation sampling to test the controls over revenue recognition of the Packet Corporation, a public company, and will use the results as part of the evidence on which to
In confirming individual accounts receivable balances, your client's customers reported the following exceptions.RequiredThis of these exceptions should be considered misstatements for evaluation
The following information relates to a non-statistical sample used for a price test of inventory:Requireda. What is the best estimate of the total misstatement?b. Are these results acceptable
The auditor must quantify the following parameters when using PPS sampling:1. Tolerable misstatement2. Expected misstatement3. Risk of incorrect acceptanceRequiredDescribe each of these parameters
Your evaluation of a statistical sample indicates that there may be a material misstatement in the population. Upon analyzing the detected misstatements, a common cause was discovered: most of the
You are designing a PPS sample to determine how many accounts receivable confirmations to send. There are 2,000 customer accounts with a total book value of $5,643,200.You estimate the maximum
You are planning the confirmation of accounts receivable. There are 2,000 customers with a total book value of $5,643,200.Tolerable misstatement is set at $175,000 and expected misstatement is
Based on the information in Problem 10-43, assume that your sampling interval is $100,000.Requireda. What is your statistical conclusion if no misstatements are found in the sample? Is this
The auditor is auditing accounts receivable. The company is a long-time client. Because of problems encountered in previous years, the auditor has assessed control risk as moderate and assigns a
You are performing a price test of inventory, which has a book value of $2,750,699 and 3,875 items. Tolerable misstatement is $150,000, expected misstatement is $30,000, and the TD risk is
Mead, CPA, was engaged to audit Jiffy Co.'s financial statements for the year ended August 31, 2007. Mead is applying the following sampling procedures.During the prior years' audits, Mead used
This case is to be used in conjunction with the facts in Problem 10-47 and can be completed individually or in groups via classroom discussion.Part 1.Without regards to the dollar amount of the
What accounts are typically affected by transactions in the revenue cycle? Identify the relationships among them.
What are the internal control objectives in the revenue cycle?
What are the major processes involved in generating and recording a sales transaction? What are the major documents generated during each process?
Why should auditors ordinarily consider revenue recognition as a fraud risk factor?
What criteria has the SEC utilized to help determine if revenue can be recognized?
Why might it be necessary to do some research in order to determine whether a client's revenue recognition policies are proper?
What methods are sometimes used to fraudulently inflate revenue?
What sometimes motivates management to overstate revenue?
What analytical procedures can help auditors identify areas of potential misstatements and design appropriate audit procedures?
What are the audit steps associated with assessing the risk of material misstatement for the revenue cycle?
What are the basic inherent risks associated with sales and accounts receivable?
Why should auditors develop an understanding of a client's control environment as it affects the accounts in the revenue cycle?
What important control functions are served by mailing monthly statements to customers? Why is it important to separate the duties of responding to customer complaints from the accounts receivable
Monitoring controls are effective in alerting management to the potential breakdown of other internal controls. Identify two or three monitoring controls that are applicable to the revenue cycle.
In assessing whether the controls are operating effectively, is it necessary for the auditor to re-perform the work of the control itself? For example, if someone tests for the correctness of
What alternative methods can be used to test the effectiveness of controls in the revenue cycle?
How do auditors use their knowledge about the risk of material misstatement in designing substantive tests?
What is the relationship between audit objectives, account balance assertions, and audit procedures?
Explain how audit evidence gathered about accounts receivable also provides evidence about sales, and vice versa.
Why is it important to directly test sales transactions as well as accounts receivable?
How can the audit of revenue provide a good opportunity to test the completeness assertion for both sales and accounts receivable?
From what population should a sample be selected to test the completeness of recorded sales? Explain your choice.
When might it be advisable to send the confirmation to the customer's personnel who is familiar with the details of sales contracts rather than to the accounts payable department?
Are direct tests of account balances generally more effective in detecting overstatements or understatements? Explain.
What is the effect on the nature, timing, and extent of substantive tests of accounts receivable when the risk of material misstatement is assessed as being low instead of high?
What are the advantages and disadvantages of performing direct tests of account balances prior to the balance sheet date?
Under what circumstances should an auditor consider confirming individual unpaid invoices as opposed to confirming the customer's total balance?
What is an aged trial balance of accounts receivable? For what purposes does an auditor use it? How does an auditor determine that it is correctly aged?
Distinguish between the positive and negative forms of accounts receivable confirmation.
Which confirmation form, the positive or the negative, is considered the more reliable? Why?
If a confirmation is not returned by a customer, what follow-up work should the auditor perform if it is aa. Positive confirmationb. Negative confirmation
Under what circumstances can a customer's confirmation be considered reliable?
When might an auditor consider using negative confirmations? What factors must be present in the client-customer environment to justify the use of the negative confirmation form?
What is a confirmation exception? Why is it important to investigate confirmation exceptions?
What evidence do vouching cash collections after the balance sheet date provide?
What are cutoff tests? What assertion(s) do they test?
What are some potential fraud indicators that may be identified by direct tests of revenue cycle accounts? What audit procedures could be used to help determine if fraud actually occurred?
How can the auditor determine whether the allowance for doubtful accounts is reasonable?
1. A manufacturing client received a substantial amount of goods returned during the last month of the fiscal year and the first month after yearend. The client recorded the returns when credit memos
1. The auditor wants to gain assurance that all telephone orders received were shipped and billed in a timely fashion. Which of the following audit procedures would be most effective in meeting the
Judgments about whether revenue should be recognized are among the most contentious that an auditor faces.The following are situations in which the auditor will be required to either acquire
One of your audit clients manufactures fishing boats and sells them all over the country. Boats are sold to dealers who finance their purchases on a floor-plan basis with their banks. The banks
You are auditing FloorMart, a retailer with 200 stores around the country. It has two basic sizes of stores—minimarts with 3,000 square feet and maxim arts with 7,500 square feet. Both types of
Stainless Steel Specialties (SSS) is a manufacturer of hot water-based heating systems for homes and commercial businesses. The company has grown about 10% in each of the past five years. The company
The following is a list of procedures performed in the audit of the revenue cycle:a. Take a block of shipping orders and account for the invoicing of all items in the block and account for the
Field, CPA, is auditing the financial statements of Miller Mail order, Inc. (MMI) for the year ended January 31, 2008. Field has compiled a list of possible errors and irregularities that may result
Drea Tech Company has been growing rapidly and has recently engaged your firm as its auditors. It is actively traded over the counter (OTC) and believes it has outgrown the service capabilities of
Verona Shoe Company is considering automating its credit approval function. It manufactures a brushed pigskin shoe and acts as a wholesaler by buying closeouts of other brands and selling them to
A client has a computerized credit approval process that incorporates various factors, such as:• Previous credit history with the company• Current credit rating obtained online from Dun &
The following is a list of controls typically implemented in the processing of sales transactions:Requireda. For each control identified, briefly indicate the financial misstatement that could occur
Jason Co. accepts VISA and MasterCard for any sales transaction exceeding $50.The company has not yet implemented online recording of the credit card transaction, but does have a toll-free number to
Computer accounting systems have the ability to generate exception reports that immediately identify control procedure failures or transactions that are out of the norm, so that management can
The audit of the revenue cycle accounts of Acco, Inc. has been planned with a low preliminary assessment of control risk related to each of the relevant assertions. A sample of sales transactions was
All invoicing for a company is done on a computer system from a price list table incorporated into the system. Only the sales department can change the prices on the approval of the department
During a discussion, one auditor noted that her approach to testing sales transactions was to select a random sample of recorded sales and trace back through the system to supporting documents,
Bert Finney, CPA, was engaged to conduct an audit of the financial statements of Clayton Realty Corporation for the month ending January 31, 2008.The examination of monthly rent reconciliation is a
The following sales were selected for a cutoff test of Genius Monitors, Inc., for the December 31, 2007financial statements. All sales are credit sales and are FOB shipping point. They are recorded
You are auditing the revenue from membership fees of your local chapter of the Institute of Management Accountants, of which you are not a member. The local chapter receives an allocation of national
Sales cutoff tests are performed to obtain evidence that sales are recorded in the proper period. You are to perform a cutoff test of sales for a manufacturer that uses pre numbered bills of lading
Sean Edwards, CPA, is engaged to audit the financial statements of Matthews Wholesaling for the year ended December 31, 2007. Edwards obtained and documented an understanding of the internal
During the year, Strang Corporation began to encounter cash flow difficulties, and a cursory review by management revealed receivable collection problems. Strang's management engaged Elaine Stanley,
The existence and completeness assertions are complementary but require different audit approaches.Requireda. Why is it more difficult to test for the completeness than the existence/ occurrence of
Your audit client, Daman, Inc., has a fully computerized accounts receivable system. There are two master files, a customer data file and an unpaid invoice file. The customer data file contains the
MiniScribe Case (based on "Cooking the Books," The Wall Street Journal, September 11, 1989; and "MiniScribe's Investigators Determine That 'Massive Fraud’ Was Perpetrated," The Wall Street

Showing 1300 - 1400 of 10295

First
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Last

Services

Sitemap
Fun
Definitions
Become Tutor
Study Help Categories
Recent Questions
Expert Questions

Company Info

Security
Copyrights
Privacy Policy
Terms & Conditions
SolutionInn Fee
Scholarship

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Campus Ambassador

Secure Payment

Download Our App

© 2024 SolutionInn. All Rights Reserved