A4 - Audit Procedures by Transaction Class

Question 1

An analysis of which account would best aid in verifying that all fixed assets have been capitalized?

Answer 1

Repairs and maintenance

Question 2

The auditor’s inventory observation test counts are traced to the client’s inventory listing to test for which financial statement assertion?

Answer 2

Completeness

Question 3

Which assertions are tested under the balances substantive procedure?

Answer 3

CVER
Completeness
Valuation, allocation and accuracy
Existence and occurrence
Rights and obligations

Question 4

Which assertions are tested under the transactions substantive procedure?

Answer 4

COVEU
Completeness
CutOff
Valuation, allocation and accuracy
Existence and occurrence
Understandability and classification

Question 5

Which assertions are tested under the disclosures substantive procedure?

Answer 5

CVRU
Completeness
Valuation, allocation and accuracy
Rights and obligations and occurrence
Understandability and classification

Question 6

T/F: The auditor should observe the physical inventory count of goods held in public warehouses if the inventory held therein is significant; otherwise, confirmation of such inventory is sufficient

Answer 6

True

Question 7

T/F: Whoever signs the checks should not mail the checks

Answer 7

False; signing and mailing prevents defalcation of checks

Question 8

What are the three concepts of proper segregation of duties?

Answer 8

ARC
Authorization
Recording
Custody