Assertions. To Memorize Flashcards
Auditor tests entities control on obtaining credit approval before shipping goods to customers to support assertion
Valuation and allocation
In determining effectiveness of Internal control relating to Occurrence assertion to Payroll transactions Auditor would
Observe segregations of duties concerning personel responsibilities and payroll disbursement
Auditor is planning the test of details on clients debt transaction. In order to test existence and occurrence transaction auditor would perform which tests?
Review the board minutes to obtain evidence of new agreements and then follow up by inspecting of new agreements
After making inquires about credit granting policies, auditor selects a sample transaction and example evidence of credit approval. This test of controls most likely support management assertion
Allocation and valuation-yes
Right and obligations-no
In Auditing client retained earnings account, an auditor should determine whether are any restrictions on retained earnings that result from loans, law, agreements. This procedure designed to collaborate management assertion
Understandability and classification
To satisfied valuation assertion when auditing investment accounted by equity method auditor most likely
Examine the audited FS of the investee company
Which procedures provides assurance about manufacturing inventory evaluation
Testing entities computation of standard overhead rate
What assertion regarding account balances at the period end
The entity holds or controls the rights to assets
Inspecting loan agreements under which an entity inventories are pledged provides evidence regarding
Presentation and disclosures
To gain assurance that all inventory items in clients listing schedule bare Valid (existing) auditor woukd trace
Items listed in inventory listing schedule to inventory tags and counted auditor’s sheets.
Vouch - directional testing of eclxistence
In testing plant and equipment balances Auditor may inspect new additions listed on the analysis. This procedure to obtain evidence conserning management assertion of
Existence- YES
Understandability and classification- NO
Which of the following not a procedure to support valuation, allocation and accuracy of inventory
Inquiry about consignment inventory
Which question will be included in internal questionnaire concerning completeness assertion for purchase?
Are PO, RECEIVING REPORTS, VOUCHERS PERIODICALLY ACCOUNTED FOR
To test valuation assertion related to stockholders equity auditor complete substantive procedures
Analyze clients retained earnings Account
The standard that auditor should be independent of mind and appearance
Objectivity
