A4 Flashcards
What is a Deposit in transit?
Disbursement recorded in one accounting period with the receipt occuring in the subsequent period
What is not a qualitative standard that should be considered when evaluating misstatements?
dollar amount of the error
What is an audit procedure would catch fictitious sales?
Sampling invoices and tracing to the related shipping documents
What internal control would deter lapping?
Deterred by appropriate segregation of duties between receiving cash and posting to the AR ledger
How does the auditor verify the interest earned on bond investments?
Recomputing the interest earned on the basis of face amount, int rate and period held
What is the primary purpose of sending a std confirmation request to financial institutions?
To corroborate information regarding deposit and loan balances
What are the two documents to be generated by the revenue cycle?
Credit memos and sales invoices
What audit procedure would be performed to obtain assurance that all inventory items in listing are valid?
Tracing from the inventory listing to the inventory tags and the auditors recorded count sheets
When using confirmations to provide evidence on completeness of AP - what is the population use?
Vendors with whom the entity has previously done business with
What confirmation would be most likely to identify a contingent liability?
Standard bank confirmation
When performing analytical procedures over LT investments - what assertion does this accomplish?
Completeness of recorded investment income
Auditors program to examine long-term debt should include steps that require
Examining bond trust indetures
If a nonissuer refuses to give permission to the auditor to communicate with external legal counsel - what should the auditor modify?
The opinion in the auditors report
If a nonissuer refuses to give permission to the auditor to communicate with external legal counsel - what should the auditor modify?
The opinion in the auditors report
