A4

Question 1

Accum depre + cash received - __________ sold = gain on sale of equipment

Answer 1

property

Question 2

What information does a voucher contain?

Answer 2

SUPPORTING DOCUMENTS FOR AN INVOICE

Question 3

A/P Confirmations used when internal controls are considered to be ____________

Answer 3

WEAK

Question 4

When lapping occurs, an employee uses current ___________ to conceal ___________ that have been stolen previously

Answer 4

REMITTANCES; REMITTANCES - any transfer of payment which completes.a business transaction

Question 5

To maintain accurate inventory records, the internal controls most likely to be used would be _________ inventory used to adjust the _________ inventory records

Answer 5

PERIODIC; PERPETUAL

Question 6

To ensure that all A/R amounts owed to an entity are represented at balance sheet date, the auditor must perform __________ tests to….

Answer 6

CUTOFF; gives assurance that transactions are recorded in the proper period

Question 7

To make sure that accounts receivables are properly described and presented in the FS, review a/r TB for amounts due from __________ and __________

Answer 7

OFFICERS; EMPLOYEES

Question 8

Ensuring that credit approval is obtained before goods are shipped to customers supports management’s financial statement assertion of _________ and _________

Answer 8

VALUATION; ALLOCATION

Question 9

Auditor analyzes repairs and maintenance to make sure that expenses for property plant and equipment have not been charges to __________

Answer 9

EXPENSE

Question 10

A controller who has record keeping abilities cannot authorize _________ of accounts receivable

Answer 10

CUTOFF

Question 11

Approval of summary of hours for each employee performed by the department supervisor will prevent what type of fraud?

Answer 11

PAYROLL FRAUD

Question 11

Blank confirmations are preferable because positive confirmations might lead to recipients not devote __________ attention to the confirmations

Answer 11

PROPER

Question 12

A function that represents a weakness in internal control related to cash disbursements is after checks are mailed, the treasurer ________ the voucher packages to the a/p department for cancellation of the voucher and filing of the documents

Answer 12

RETURNS

Question 13

A matter where materiality limits don’t matter is when there is ________ involving management

Answer 13

FRAUD

Question 14

The A/P department is responsible for ___________ and ___________ the accuracy of supporting documents and __________ unpaid vouchers

Answer 14

PREPARING; VERIFYING; APPROVING

Question 15

To detect overstatement of sales the auditor should trace transactions from the ________ journal to the __________ documents

Answer 15

SALES; SHIPPING

Question 16

Best procedure for identifying unrecorded trade accounts receivable is __________ cash disbursements recorded subsequent to the bs date to determine whether the related payables apply to the prior period

Answer 16

REVIEWING

Question 17

Confirmation to customer is the most appropriate audit procedure to test the ____________ of accounts receivable

Answer 17

Existence

Question 18

When nonconforming goods are returned the purchasing department should send a _________ memo to the accounting department

Answer 18

DEBIT

Question 19

When PPE significantly decreased from PY and auditor expected PP&E to stay the same, the auditor would review ________ and _______ accounts for proper classifications

Answer 19

REPAIRS, MAINTENANCE

Question 20

Observation of physical inventory counts provide evidence for ___________ and ____________

Answer 20

EXISTENCE; COMPLETENESS

Question 21

in the revenue cycle, people in the sales department having access to credit memos could lead to defalcation schemes. This is a result of ____________ internal _________ policies and __________

Answer 21

INEFFECTIVE, CONTROL; PROCEDURES

Question 22

Positive confirmations are used when 1) large individual ___________ 2) there are expected __________ or items in dispute 3) when system of internal control is ______

Answer 22

ACCOUNTS; ERRORS; WEAK

Question 23

Negative confirmations are used when 1) inherent and control risk are assessed to be ______ 2) large number of _______ account balances are being confirmed 3) no reason to suspect recipients will _________ them

Answer 23

LOW; SMALL; IGNORE

Question 24

To test existence and occurence of stock related transactions, auditor may __________ stock related transactions to board minutes or __________ the stock certificate

Answer 24

VOUCH; INSPECT

Question 25

when obtaining management representations, materiality limits don’t apply to matters not related to numbers on the FS like availability of __________ minutes

Answer 25

BOARD

Question 26

A bank______ ______allows for a reduced risk of diversion by employees because it

Answer 26

LOCK; BOX

Question 27

To test the existence of investments, an auditor should send _________

Answer 27

CONFIRMATIONS

Question 28

Examination of shipments not recorded in the sales journal is a test of controls to determine if all _______ have been _________

Answer 28

SALES; RECORDED

Question 28

When those charged with governance are not involved in management, auditor should communicate __________ errors brought up to management that we corrected

Answer 28

SIGNIFICANT

Question 29

To make sure sales are properly approved, auditor would test to see if sales orders are sent to the _________ department for approval

Answer 29

CREDIT

Question 30

When cash received is greater than invoiced amount this could indicate __________ sales and when cash received is less than invoiced amount this could indicate unrecorded sales ________

Answer 30

UNRECORDED; RETURNS

Question 31

When tracing, you are testing for the __________ of an item

Answer 31

INCLUSION

Question 32

An auditor would examine inventory to make sure that it _______ and that no amounts have been __________

Answer 32

EXISTS; OVERSTATED

Question 33

When control risk is assessed as low, less __________ testing is required which means substantive testing is limited to ___________ procedures and ___________ of year end accruals

Answer 33

SUBSTANTIVE; ANALYTICAL; RECALCULATING

Question 34

To test for overstatement of revenues, auditor would select a sample of ______ invoices and trace to the related ________ documents

Answer 34

SALES; SHIPPING