Term
Auditors use preliminary analytical analytical procedures to help identify potential misstatements in inv. Which of the following would not be useful for this purpose?
a. calculating inv turnover
b. aging inventory
c. comparing teh percent change in inventory with the percent change in sales
d. ALL |
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Definition
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Term
The auditor's analytical procedures are facilitated if the client does which of the following?
a. Uses a standard cost system that produces variance reports.
b. Segregates obsolete inv before the physical inventory count
c. corrects reportable conditions in IC before the beg of the audit
d. reduces inv balances to the lower of cost or market |
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Definition
| A. Uses a standard cost system that produces variance reports. |
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Term
| Which of the following controls would be most effective in assuring that recorded purchases are free of material errors? |
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Definition
| D. Accts payable personnel match purchase orders, receiving reports, and verdor' invoices before approval for payment. |
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Term
Which of the following in teh cash disbursements cycle should not be performed by the accts pay department?
a. comparing the vendor's invoice with the receiving report
b. canceling supporting documentation after payment
c. verifying mathematical accuracy of the vedor's invoice
d. approving the invoice for payment |
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Definition
| B. Canceling supporting doc after payment |
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Term
To determine whether accts pay are complete, an auditor performs a test to verify that all merchandise received is recorded. The population o documents for this test consists of all:
a. Vendor's invoices
b. Purchase orders
c. Receiving reports
d. Canceled checks |
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Definition
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Term
tracing debits from the inv. acct to receiving reports and purchase orders provides evidence that:
a. all receipts of merchandise were properly recorded
b. recorded inventory purchases were for goods received and were properly authorizes
c. all vendor invoices have been properly recognized as a purchase and payable
d. inv is not understated |
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Definition
| B. recorded inv purchases were for goods received and were properly authorized |
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Term
after accounting for a sequence of inventory tags, an auditor traces a sample of tags to the physical inv list and reconciles the sequences counted to the inventory list to obtain evidence that all items:
a. included in the list have been counted
b. represented by inventory tags are included in the list
c. included in the list are represented by inventory tags
d. represented by inventory tags are bona fide. |
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Definition
| B. Items represented by inv tags are included in the list |
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Term
Which of the following is not one of the independent auditor's objectives regarding the examination of inventories?
a. verifying that inv counted is owned by the client
b. verifying that the client has used proper inventory pricing
c. ascertaining the physical quantities of inventory on hand
d. verifying that all inv owned by the client is on hand at the time of the count |
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Definition
| D. veryifying that all inv owned by the client is on hand at the time of the count |
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Term
the auditor tests the quantity of materials charged to work in process by tracing these quatities from the wip accounts to
a. cost ledgers
b. perpetual inventory records
c receiving reports
d. material requisitions |
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Definition
| B. Perpetual inventory records |
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Term
| Which of the following audit procedures is best for identifying unrecorded trade accounts payable? |
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Definition
| C. Reviewing cash disbursements recorded subsequent to the balance sheet date to determine whether the related payables apply to the prior period. |
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Term
When co's use automated inv systems and info technology extensively, evidence may be available only in electronic form. What is an auditor's best course of action in such situations?
a. assess the control risk as high.
b. use audit software to perform analytical procedures.
c. use generalized audit software to extract evidence from client databases.
d. perform limited test of controls over electronic data. |
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Definition
| C. Use generalized audit software to extract evidence from from client databases |
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