Question
1- Which assertion does the audit of accounts payable place more emphasis on gathering evidence about? Select answer from the options below existence completeness occurrence
1- Which assertion does the audit of accounts payable place more emphasis on gathering evidence about?
Select answer from the options below
existence
completeness
occurrence
diversification
2- Which of the following controls ensures that employees of the entity are paid only for the hours worked?
Select answer from the options below
Employee signing in at work.
Prompt notification of an employee termination.
Independent check of the personnel master file.
Segregation of the payroll and personnel departments.
3- The risk of paying employees more than the authorized rate relates to the auditor objective of
Select answer from the options below
accuracy.
completeness.
cut-off.
occurrence.
4- Auditors will check to ensure receiving reports and purchase orders are pre-numbered. This test of control relates to the audit objective of
Select answer from the options below
existence.
presentation and classification.
cut-off.
valuation.
5- Which of the following is NOT a function of the purchase cycle?
Select answer from the options below
requisitioning goods
receiving goods
preparing purchase orders
issuing invoices
6- Which of the following tests performed by an auditor could be a dual purpose test?
Select answer from the options below
Inquiry of procedures surrounding the requisition of goods.
Examining supporting documentation for invoices.
Observing the performance by receiving clerks.
Examining purchase orders for approved requisitions.
7- Which of the following assertions is most at risk for the purchase and payables cycle?
Select answer from the options below
classification
accuracy
completeness
existence
8- Which of the following is NOT an important control related to the hiring of employees?
Select answer from the options below
Segregating the functions of personnel and payroll.
Restricting access to the personnel master file.
Employees are hired by the human resources department.
Changes to the master file are checked by the same person who enters the data into the computer.
9- What information is usually NOT included on a confirmation of accounts payable?
Select answer from the options below
Supplier name and address.
Request for the amount of purchase commitments at a specific date.
Signature of management.
Balance owing at a specific date.
10- Generally speaking, overall audit risk needs to be
Select answer from the options below
significant.
low.
moderate.
high.
11- Which of the following describes the audit objective of accuracy, valuation, and allocation as it relates to inventory?
Select answer from the options below
inventories recorded represent items on hand at the end of the reporting period
the entity has rights to the inventories included in the balance sheet
inventories are properly stated at the lower of cost and net realizable value, determined in accordance with applicable accounting standards
inventories include all materials, products, and supplies on hand at the end of the reporting period
12- Which of the following accurately describes the auditors assessment of control risk for property, plant, and equipment?
Select answer from the options below
always assessed as high because transactions are usually few and material
rarely assessed because there are typically many immaterial transactions
rarely assessed because transactions are usually few and material
assessed as high because there are typically many immaterial transactions
13- Which of the following documents controls the movement of goods from raw materials through work in process through to finished goods?
Select answer from the options below
inventory transfer requisition
receiving report
purchase requisition
shipping document
14- Ensuring disposals are correctly journalized and posted provides evidence related to which audit objective?
Select answer from the options below
classification
completeness
occurrence
accuracy
15- The initial procedures an auditor performs on the inventory balance are to gather evidence for the assertion of
Select answer from the options below
occurrence and existence.
completeness.
rights and obligations.
accuracy, valuation, and allocation.
16- Which of the following is accurate as it relates to the auditors approach, if the entity determines inventory quantities by a physical count at or near the end of the reporting period?
Select answer from the options below
this is a control testing approach to auditing inventory
this is a substantive-based approach to auditing inventory
inventory records are essential to this auditing method
approach is used when inventory value is immaterial
17- An auditor is performing an audit for a merchandising entity that has material amounts of property and plant and an immaterial amount of equipment. What audit strategy is the auditor likely to follow?
Select answer from the options below
substantive approach
combined approach
analytical approach
control testing approach
18- Which of the following describes the audit objective of completeness with respect to the presentation and disclosure of property, plant, and equipment?
Select answer from the options below
non-current asset balances include all applicable assets used in operations at the end of the reporting period
transactions are disclosed accurately and at appropriate amounts
property, plant, and equipment are appropriately aggregated and or disaggregated
information presented is clearly expressed, relevant, and understandable
19- Who would be the most appropriate person for the entity to assign responsibility to for the inventory count?
Select answer from the options below
warehouse manager
employee responsible for ordering inventory
inventory receiving clerk
accounts receivable manager
20- When an auditor observes the entitys physical inventory count, they are performing a(n)
Select answer from the options below
test of details of balances.
initial procedure.
test of details of transactions.
analytical procedure.
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