A4

Question 1

Least thing will be done when not confirmation reply is received for AR

Answer 1

Increase the assessed level of detection risk for valuation assertion

Question 2

Review of AR gaining to support MNGMT’s FS assertion of..?

Answer 2

Valuation & Allocation

Question 3

Negative confirmations provide __________ persuasive audit evidence than positive confirmations.

Answer 3

LESS

Question 4

Negative confirmations should be used if there is ______ exception rate is expected

Answer 4

LOW

en estas only requires response if there is a discrepancy

Question 5

When auditor’s combined assessment of control risk and inherit risk is low… auditor should issue what type of confirmation?

Answer 5

POSITIVE

en esta los campos estan llenos y cliente tiene que confirmar que esta deacurdo

Question 6

When recipients are likely to sign confirmations w/o careful investigation… Auditor should send a…

Answer 6

Blank confirmation
Si comunmente no se fijan es mejor mandar una blank pq asi ellos tienen que detenerse y lelnar los campos vacios.

Question 7

Write-offs should be approved by what DPT?

Answer 7

Treasury

Question 8

External confirmation Factor

Answer 8

Factor for an auditor to consider when designing confirmation request is the assertion being tested
i.e. si estas probando presentation no tiene caso pero si estas haciendo Complentess sSI

Question 9

Auditors TOC for completeness in revenue cycle usually include?

Answer 9

An invoice is prepared for e/ shipping Doc

Question 10

Shipping documents provide evidence that ….

Answer 10

Sale Occured

Question 11

Significant debits to accumulated depreciation =

Answer 11

Assets were retired

Question 12

Risk assessed as low for assertions related to payroll-> substantive test of payroll balance would be limited to …

Answer 12

applying analytical procedures & “Recalculating payroll accruals”

Question 13

AR Confirmation rarely provides reliable evidence about completeness assertion b/c

Answer 13

Customers may not be inclined to report understatement errors in their account.

Question 14

Inventory completeness assertion best tested via

Answer 14

Cut-off

Question 15

Auditing retained earnings … assertion

Answer 15

Understandability of presentation & classification

Question 16

TOC most likely would help assure that goods shipped are properly billed?

Answer 16

Examine shipping documents for matching sales invoices

Bill=invoice

Question 17

When client will NOT permit inquiry w/Legal counsel .. Auditor report Opinion =

Answer 17

Disclaimer … treat the inquiry as document support (GAAS) b/s it is a SCOPE LIMITATION

Question 18

Key factors & assumptions in evaluating the reasonableness of an accounting estimate :

Answer 18

1) significant to the acct estimate
2) sensitive to variations
3) deviations from historical
4)subjective & susceptible to misstatements and bias.

Question 19

Upon receipt of customer check in mailroom… employee prepare remittance listing is forwarded to cashier &

Answer 19

Accounts receivable bookkeeper to update the subsidiary AR records.

Question 20

ALL material weakness are significant decifiencies

Answer 20

materia es defecar

tosa la materia esta incluida cuando defecas

Question 21

Reviewing credit ratings of customers w/delinquent AR refers to what type of assertion

Answer 21

Valuation & Allocation

Question 22

Auditor most likely to identify “contingent liabilities” in a “Standard bank confirmation” because….

Answer 22

Contingent Liabilities can be shown in the “exceptions & comments box “ in a Standard bank confirmations

Por otro lado AP no es pq those are existing Liab not “contingent”

Question 23

When reporting on entity’s IC … Auditor should

Answer 23

restrict the use of the report

Question 24

Cashier receives remittance from the mailroom… should also prepare?

Answer 24

Daily deposit slips