11) The most important control in the payroll cycle is clear, proper documentation of the employees job responsibilities and wages by the appropriate level of authority. This control is associated with which audit objective?

A) completeness

B) classification

C) valuation

D) occurrence

12) Because of the lack of available evidence, it is usually difficult for an auditor to discover if an employee records more time on his or her time card than they actually worked. One procedure is to reconcile the total hours

A) paid this period with a previous period.

B) paid according to the payroll records with an independent record of the total hours worked, such as those maintained by production control.

C) worked this period with a previous period.

D) worked according to the summary payroll report with the total hours worked as recorded on the time card for the period.

13) In the audit of the transactions and amounts in the capital acquisitions and repayments cycle, the auditor must ensure that significant legal requirements affecting the financial statements have been properly fulfilled and

A) any violations are reported to the relevant provincial securities commissions.

B) any departures from the agreements are made with management's knowledge and consent.

C) are adequately disclosed in the financial statements.

D) must issue a disclaimer if they haven't been fulfilled.

14) Recalculation of an approximate interest expense using the basis of average interests rates and overall monthly notes payable could detect what type of possible misstatement?

A) misstatement of interest expense or accrued interest, or omission of a note payable

B) omission or misstatement of a note payable

C) misclassification of a note payable as long-term rather than current

D) misclassification of notes payable, interest expense, or accrued interest

15) The tests of details of balances procedure that requires the auditor to trace the totals of the notes payable list to the general ledger satisfies the objective of

A) existence.

B) completeness.

C) accuracy.

D) rights and obligations.

16) The auditor recomputed the dividend declaration amount by multiplying the declared dividend per share by the number of shares outstanding. Which audit assertion is this associated with?

A) completeness

B) accuracy

C) valuation

D) existence

17) When are short-term investments that are readily converted to cash included in the cash account in the financial statements?

A) if they are held in local currency (i.e., Canadian dollars)

B) when there is little risk of change in value

C) when they are under the control of the treasury department

D) if interest has been paid up to the year end date

18) Because cash is the most desirable asset for people to steal, it has a higher

A) inherent risk.

B) control risk.

C) detection risk.

D) materiality.

19) When examining the bank reconciliation for the imprest payroll account, it is normal for the only reconciling item to be

A) outstanding cheques.

B) direct deposits from customers.

C) outstanding deposits.

D) corrections to payroll amounts.

20) Jane works for Middle Co. She is responsible for opening the mail and preparing the bank deposit for cheques received, which she then gives to the owner. After the owner has deposited the cash, he gives Jane the stamped bank deposit slip, which she uses to record the cash received in the accounts receivable records. How does this allocation of responsibilities affect the audit process?

A) The auditor should increase control testing with respect to the accuracy assertion.

B) The auditor should do substantive tests (compare the deposit slips to the accounts receivable records).

C) The auditor should consider the possibility of material fraud.

D) The auditor should increase control testing with respect to the completeness assertion.