A4 Flashcards
Accum depre + cash received - __________ sold = gain on sale of equipment
property
What information does a voucher contain?
SUPPORTING DOCUMENTS FOR AN INVOICE
A/P Confirmations used when internal controls are considered to be ____________
WEAK
When lapping occurs, an employee uses current ___________ to conceal ___________ that have been stolen previously
REMITTANCES; REMITTANCES - any transfer of payment which completes.a business transaction
To maintain accurate inventory records, the internal controls most likely to be used would be _________ inventory used to adjust the _________ inventory records
PERIODIC; PERPETUAL
To ensure that all A/R amounts owed to an entity are represented at balance sheet date, the auditor must perform __________ tests to….
CUTOFF; gives assurance that transactions are recorded in the proper period
To make sure that accounts receivables are properly described and presented in the FS, review a/r TB for amounts due from __________ and __________
OFFICERS; EMPLOYEES
Ensuring that credit approval is obtained before goods are shipped to customers supports management’s financial statement assertion of _________ and _________
VALUATION; ALLOCATION
Auditor analyzes repairs and maintenance to make sure that expenses for property plant and equipment have not been charges to __________
EXPENSE
A controller who has record keeping abilities cannot authorize _________ of accounts receivable
CUTOFF
Approval of summary of hours for each employee performed by the department supervisor will prevent what type of fraud?
PAYROLL FRAUD
Blank confirmations are preferable because positive confirmations might lead to recipients not devote __________ attention to the confirmations
PROPER
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
RETURNS
A matter where materiality limits don’t matter is when there is ________ involving management
FRAUD
The A/P department is responsible for ___________ and ___________ the accuracy of supporting documents and __________ unpaid vouchers
PREPARING; VERIFYING; APPROVING
To detect overstatement of sales the auditor should trace transactions from the ________ journal to the __________ documents
SALES; SHIPPING
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
REVIEWING
Confirmation to customer is the most appropriate audit procedure to test the ____________ of accounts receivable
Existence
When nonconforming goods are returned the purchasing department should send a _________ memo to the accounting department
DEBIT
When PPE significantly decreased from PY and auditor expected PP&E to stay the same, the auditor would review ________ and _______ accounts for proper classifications
REPAIRS, MAINTENANCE
Observation of physical inventory counts provide evidence for ___________ and ____________
EXISTENCE; COMPLETENESS
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 __________
INEFFECTIVE, CONTROL; PROCEDURES
Positive confirmations are used when 1) large individual ___________ 2) there are expected __________ or items in dispute 3) when system of internal control is ______
ACCOUNTS; ERRORS; WEAK
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
LOW; SMALL; IGNORE
To test existence and occurence of stock related transactions, auditor may __________ stock related transactions to board minutes or __________ the stock certificate
VOUCH; INSPECT
when obtaining management representations, materiality limits don’t apply to matters not related to numbers on the FS like availability of __________ minutes
BOARD
A bank______ ______allows for a reduced risk of diversion by employees because it
LOCK; BOX
To test the existence of investments, an auditor should send _________
CONFIRMATIONS
Examination of shipments not recorded in the sales journal is a test of controls to determine if all _______ have been _________
SALES; RECORDED
When those charged with governance are not involved in management, auditor should communicate __________ errors brought up to management that we corrected
SIGNIFICANT
To make sure sales are properly approved, auditor would test to see if sales orders are sent to the _________ department for approval
CREDIT
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 ________
UNRECORDED; RETURNS
When tracing, you are testing for the __________ of an item
INCLUSION
An auditor would examine inventory to make sure that it _______ and that no amounts have been __________
EXISTS; OVERSTATED
When control risk is assessed as low, less __________ testing is required which means substantive testing is limited to ___________ procedures and ___________ of year end accruals
SUBSTANTIVE; ANALYTICAL; RECALCULATING
To test for overstatement of revenues, auditor would select a sample of ______ invoices and trace to the related ________ documents
SALES; SHIPPING
