AUD 3 Internal Control 16 - 6 Operating Cycles - Investing and Financing Cycle

Question 1

Investing and Financing Cycle

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness; and
• 2) and have the expectation that the hedge will be highly effective.

The auditor should gather evidence that management has met these requirements.

In addition:

Fair Value Hedges
• For fair value hedges, the auditor should obtain evidence to support the recorded change in the hedged item that is attributable to the hedged risk.

Cash Flow Hedges
• For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

 o Regarding the frequency of similar past transactions.
 o Supporting the entity’s ability to execute the transaction.
 o Indicating the loss that might result if the transaction does not occur.
 o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Answer 1

Investing and Financing Cycle

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness; and
• 2) and have the expectation that the hedge will be highly effective.

The auditor should gather evidence that management has met these requirements.

In addition:

Fair Value Hedges
• For fair value hedges, the auditor should obtain evidence to support the recorded change in the hedged item that is attributable to the hedged risk.

Cash Flow Hedges
• For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

 o Regarding the frequency of similar past transactions.
 o Supporting the entity’s ability to execute the transaction.
 o Indicating the loss that might result if the transaction does not occur.
 o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 2

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

Answer 2

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

Question 3

Investing and Financing Cycle

Most t___ing related to Property, plant, and equipment transactions

Answer 3

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions

Question 4

Investing and Financing Cycle

Most testing related to Pro___ty, plant, and equipment transactions concerns itself with the different types of controls

Answer 4

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls

Question 5

Investing and Financing Cycle

Most testing related to Property, p___t, and equipment transactions concerns itself with the different types of controls

Answer 5

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls

Question 6

Investing and Financing Cycle

Most testing related to Property, plant, and eq_______t transactions concerns itself with the different types of controls

Answer 6

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls

Question 7

Investing and Financing Cycle

Most testing related to Property, plant, and equipment trans______s concerns itself with the different types of controls

Answer 7

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls

Question 8

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions co_____s itself with the different types of controls

Answer 8

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls

Question 9

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the diff______ types of controls that reduce the risk of misstatement.

Answer 9

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

Question 10

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of con____s that reduce the risk of misstatement.

Answer 10

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

Question 11

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that red___ the risk of misstatement.

Answer 11

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

Question 12

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the ri__ of misstatement.

Answer 12

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

Question 13

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal con____ structure, the internal audit staff will periodically inspect physical assets.

Answer 13

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

Question 14

Investing and Financing Cycle

In a g__d internal control structure,

Answer 14

Investing and Financing Cycle

In a good internal control structure,

Question 15

Investing and Financing Cycle

In a good in______l control structure,

Answer 15

Investing and Financing Cycle

In a good internal control structure,

Question 16

Investing and Financing Cycle

In a good internal control stru____, the internal audit staff will periodically inspect physical assets.

Answer 16

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

Question 17

Investing and Financing Cycle

In a good internal control structure, the internal a___t staff will periodically inspect physical assets.

Answer 17

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

Question 18

Investing and Financing Cycle

In a good internal control structure, the int_____ audit staff will periodically inspect physical assets.

Answer 18

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

Question 19

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will per______ly inspect physical assets.

Answer 19

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

Question 20

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically ins____ physical assets.

Answer 20

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

Question 21

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical as___s.

Answer 21

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

Question 22

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically ins____ physical assets.

Answer 22

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

Question 23

Investing and Financing Cycle

In a good internal control structure, the internal audit st__f will periodically inspect physical assets.

Answer 23

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

Question 24

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle inc___es acquisitions, disposals and depreciation expense.

Answer 24

Investing and Financing Cycle

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 25

Investing and Financing Cycle

This c___e includes acquisitions, disposals and depreciation expense.

Answer 25

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense.

Question 26

Investing and Financing Cycle

This cycle includes ac________s, disposals and depreciation expense.

Answer 26

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense.

Question 27

Investing and Financing Cycle

This cycle includes acquisitions, disp____s and depreciation expense.

Answer 27

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense.

Question 28

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depr_________ expense.

Answer 28

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense.

Question 29

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation exp____.

Answer 29

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense.

Question 30

Investing and Financing Cycle

Most t___ing related to Property, plant, and equipment (P__) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Answer 30

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 31

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions con____s itself with the different t___s of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Answer 31

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 32

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that re___e the ri__ of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Answer 32

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 33

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a g__d internal control stru_____, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Answer 33

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 34

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically ins____ physical as___s.

This cycle includes acquisitions, disposals and depreciation expense.

Answer 34

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 35

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This c___e includes acqu_______s, disposals and depreciation expense.

Answer 35

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 36

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, dispo___s and depre______ expense.

Answer 36

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 37

Investing and Financing Cycle

Most testing related to Pro____y, pl__t, and eq____ent (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Answer 37

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 38

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation ex___se.

Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Answer 38

Investing and Financing Cycle

Most testing related to Property, plant, and equipment (PPE) transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 39

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense.

Among the obj_____s are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Answer 39

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense.

Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 40

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Ve___ying the existence of recorded assets

Answer 40

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets

Question 41

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the exi_______ of recorded assets

Answer 41

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets

Question 42

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of re____ed assets

Answer 42

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets

Question 43

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded as___s
by Vouching from records to the physical assets.

Answer 43

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

Question 44

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vo___ing from records to the physical assets.

Answer 44

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

Question 45

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from re____s to the physical assets.

Answer 45

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

Question 46

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the ph______ assets.

Answer 46

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

Question 47

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

This can assist in id_____ying unrecorded disposals.

Answer 47

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

Question 48

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

This can assist in identifying unr_____ed disposals.

Answer 48

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

Question 49

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

This can assist in identifying unrecorded disp____s.

Answer 49

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

Question 50

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical as___s.

This can assist in identifying unrecorded disposals.

Answer 50

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

Question 51

Investing and Financing Cycle

Among the objectives are:

• V___fying the ex______ of recorded assets
by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Answer 51

Investing and Financing Cycle

Among the objectives are:

• Verifying the existence of recorded assets
by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 52

Investing and Financing Cycle

Among the objectives are:

• Verifying the com______ess of acquisitions

Answer 52

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions

Question 53

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acq______s
by Tracing from the physical assets to the records.

Answer 53

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

Question 54

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical as___s to the records.

Answer 54

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

Question 55

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by T___ing from the physical assets to the records.

Answer 55

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

Question 56

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the ph___cal assets to the records.

Answer 56

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

Question 57

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the re____s.

This can assist in identifying unrecorded acquisitions.

Answer 57

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 58

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

This can assist in id____ifying unrecorded acquisitions.

Answer 58

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 59

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

This can assist in identifying unre____ed acquisitions.

Answer 59

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 60

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

This can assist in identifying unrecorded ac________ns.

Answer 60

Investing and Financing Cycle

Among the objectives are:

• Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 61

Investing and Financing Cycle

This cycle includes ac_______s, disposals and depreciation ex____e. Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Answer 61

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 62

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the exi_______ of recorded assets by V____ing from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Answer 62

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 63

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the com______ss of acquisitions by T___ing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Answer 63

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 64

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the obj______s are:

• Ve___ying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Ve___ying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Answer 64

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 65

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the exi_______ of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the comp_______ of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Answer 65

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 66

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the exi_______ of re____ed assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Answer 66

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 67

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the comp________ of acq________s by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Answer 67

Investing and Financing Cycle

This cycle includes acquisitions, disposals and depreciation expense. Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

• Verifying the completeness of acquisitions by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 68

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets. This can assist in identifying unrecorded disposals.
• Verifying the completeness of acquisitions by Tracing from the physical assets to the records. This can assist in identifying unrecorded acquisitions.

Answer 68

Investing and Financing Cycle

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Among the objectives are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets. This can assist in identifying unrecorded disposals.
• Verifying the completeness of acquisitions by Tracing from the physical assets to the records. This can assist in identifying unrecorded acquisitions.

Question 69

Investing and Financing Cycle

A common problem involves the re____ing of equipment purchases in expense accounts,

Answer 69

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts,

Question 70

Investing and Financing Cycle

A common pro____ involves the recording of equipment purchases in expense accounts,

Answer 70

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts,

Question 71

Investing and Financing Cycle

A common problem involves the recording of equipment pur______s in expense accounts,

Answer 71

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts,

Question 72

Investing and Financing Cycle

A common problem involves the recording of eq________ purchases in expense accounts,

Answer 72

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts,

Question 73

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in ex_______ accounts, especially for repairs and maintenance.

Answer 73

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts, especially for repairs and maintenance.

Question 74

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts, especially for re____s and maintenance.

Answer 74

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts, especially for repairs and maintenance.

Question 75

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts, especially for repairs and mai________.

Answer 75

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts, especially for repairs and maintenance.

Question 76

Investing and Financing Cycle

A com___ problem involves the recording of equipment purchases in expense accounts, especially for repairs and maintenance.

Besides the tracing of physical assets to records mentioned above, the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts, since large variances may indicate the expensing of costs that should have been capitalized.

Answer 76

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts, especially for repairs and maintenance.

Besides the tracing of physical assets to records mentioned above, the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts, since large variances may indicate the expensing of costs that should have been capitalized.

Question 77

Investing and Financing Cycle

Besides the t___ing of physical assets to records

Answer 77

Investing and Financing Cycle

Besides the tracing of physical assets to records

Question 78

Investing and Financing Cycle

Besides the tracing of physical as___s to records

Answer 78

Investing and Financing Cycle

Besides the tracing of physical assets to records

Question 79

Investing and Financing Cycle

Besides the tracing of physical assets to re____s

Answer 79

Investing and Financing Cycle

Besides the tracing of physical assets to records

Question 80

Investing and Financing Cycle

Besides the tracing of ph____al assets to records,

the internal audit staff may also examine the relevant accounts

Answer 80

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

Question 81

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal a___t staff may also examine the relevant accounts

Answer 81

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

Question 82

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the inte____ audit staff may also examine the relevant accounts

Answer 82

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

Question 83

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also exa____ the relevant accounts

Answer 83

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

Question 84

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the rele____ accounts

Answer 84

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

Question 85

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant acc____s

and compare them with budgeted amounts,

Answer 85

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

Question 86

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with b___eted amounts,

Answer 86

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

Question 87

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted am____s,

since large variances may indicate the expensing of costs that should have been capitalized.

Answer 87

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 88

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since l___e variances may indicate the expensing of costs that should have been capitalized.

Answer 88

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 89

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since large va____ces may indicate the expensing of costs that should have been capitalized.

Answer 89

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 90

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since large variances may indicate the ex____ing of costs that should have been capitalized.

Answer 90

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 91

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since large variances may indicate the expensing of c___s that should have been capitalized.

Answer 91

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 92

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been ca_______ed.

Answer 92

Investing and Financing Cycle

Besides the tracing of physical assets to records,

the internal audit staff may also examine the relevant accounts

and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 93

Investing and Financing Cycle

Besides the t___ing of physical as___s to records,
the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Answer 93

Investing and Financing Cycle

Besides the tracing of physical assets to records,
the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 94

Investing and Financing Cycle

Besides the t___ing of physical assets to rec___s,
the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Answer 94

Investing and Financing Cycle

Besides the tracing of physical assets to records,
the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 95

Investing and Financing Cycle

Besides the tracing of physical assets to records,
the internal audit staff may also exa____the relevant acc____s and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Answer 95

Investing and Financing Cycle

Besides the tracing of physical assets to records,
the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 96

Investing and Financing Cycle

Besides the tracing of physical assets to records,
the internal audit staff may also examine the relevant accounts and com____ them with bu____ed amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Answer 96

Investing and Financing Cycle

Besides the tracing of physical assets to records,
the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 97

Investing and Financing Cycle

Besides the tracing of physical assets to records,
the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts,

since large vari____s may indicate the ex____ing of costs that should have been capitalized.

Answer 97

Investing and Financing Cycle

Besides the tracing of physical assets to records,
the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 98

Investing and Financing Cycle

Besides the tracing of physical assets to records,
the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that sh___d have been ca____ized.

Answer 98

Investing and Financing Cycle

Besides the tracing of physical assets to records,
the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts,

since large variances may indicate the expensing of costs that should have been capitalized.

Question 99

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts, especially for repairs and maintenance.

Besides the tracing of physical assets to records, the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts, since large variances may indicate the expensing of costs that should have been capitalized.

Answer 99

Investing and Financing Cycle

A common problem involves the recording of equipment purchases in expense accounts, especially for repairs and maintenance.

Besides the tracing of physical assets to records, the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts, since large variances may indicate the expensing of costs that should have been capitalized.

Question 100

What does an entity use to protect itself against various risks that may be inherent in the assets or liabilities they hold?

Answer 100

What does an entity use to protect itself against various risks that may be inherent in the assets or liabilities they hold?

Answer: An entity uses derivatives as hedges

An entity uses derivatives as hedges
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

The purpose of the hedge is to shift the risk to a counter-party.

Question 101

What does an entity use to protect itself against various risks that may be inherent in the assets they hold?

An entity uses de________ as hedges
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

The purpose of the hedge is to shift the risk to a counter-party.

Answer 101

What does an entity use to protect itself against various risks that may be inherent in the assets they hold?

An entity uses derivatives as hedges
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

The purpose of the hedge is to shift the risk to a counter-party.

Question 102

What does an entity use to protect itself against various risks that may be in anticipated transactions?

An entity uses de________ as hedges
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

Answer 102

What does an entity use to protect itself against various risks that may be in anticipated transactions?

An entity uses derivatives as hedges
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

Question 103

What does an entity use to protect itself against various risks that may be inherent in the liabilities they hold?

An entity uses derivatives as he___s
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

Answer 103

What does an entity use to protect itself against various risks that may be inherent in the liabilities they hold?

An entity uses derivatives as hedges
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

Question 104

What does an entity use to protect itself against various risks that may be inherent in other aspects of their business?

An entity uses ___________ as hedges
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

Answer 104

What does an entity use to protect itself against various risks that may be inherent in other aspects of their business?

An entity uses derivatives as hedges
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

Question 105

What does an entity use to protect itself against various risks that may be inherent in the assets they hold?

An entity uses ___________ as ________
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

Answer 105

What does an entity use to protect itself against various risks that may be inherent in the assets they hold?

An entity uses derivatives as hedges
to protect itself against various risks that may be

• inherent in the assets or liabilities they hold,
• in anticipated transactions, or
• other aspects of their business.

Question 106

What is the purpose of the hedge?

Answer 106

The purpose of the hedge is to shift the risk to a counter-party.

Question 107

What is the purpose of the hedge?

The purpose of the hedge is to ____ the risk to a counter-party.

Answer 107

What is the purpose of the hedge?

The purpose of the hedge is to shift the risk to a counter-party.

Question 108

What is the purpose of the hedge?

The purpose of the hedge is to shift the ____ to a counter-party.

Answer 108

What is the purpose of the hedge?

The purpose of the hedge is to shift the risk to a counter-party.

Question 109

What is the purpose of the hedge?

The purpose of the hedge is to shift the risk to a ___________________.

Answer 109

What is the purpose of the hedge?

The purpose of the hedge is to shift the risk to a counter-party.

Question 110

What is the purpose of the hedge?

The purpose of the hedge is to _____ the ____ to a counter-party.

Answer 110

What is the purpose of the hedge?

The purpose of the hedge is to shift the risk to a counter-party.

Question 111

What is the purpose of the hedge?

The purpose of the hedge is to shift the risk to a ________-party.

Answer 111

What is the purpose of the hedge?

The purpose of the hedge is to shift the risk to a counter-party.

Question 112

What are example of an entity uses derivatives as hedges?

1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge

Answer 112

What are example of an entity uses derivatives as hedges?

1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge

Question 113

What are example of an entity uses derivatives as hedges?

Answer 113

What are example of an entity uses derivatives as hedges?

1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge

Question 114

What are example of an entity uses derivatives as hedges?

1. ____________ Hedge
2. Cash Flow Hedge
3. Net Investment Hedge

Answer 114

What are example of an entity uses derivatives as hedges?

1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge

Question 115

What are example of an entity uses derivatives as hedges?

1. Fair Value Hedge
2. __________ Hedge
3. Net Investment Hedge

Answer 115

What are example of an entity uses derivatives as hedges?

1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge

Question 116

What are example of an entity uses derivatives as hedges?

1. Fair Value Hedge
2. Cash Flow Hedge
3. ________________ Hedge

Answer 116

What are example of an entity uses derivatives as hedges?

1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge

Question 117

What are example of an entity uses derivatives as hedges?

1. ___________ Hedge
2. ____________ Hedge
3. _________________ Hedge

Answer 117

What are example of an entity uses derivatives as hedges?

1. Fair Value Hedge
2. Cash Flow Hedge
3. Net Investment Hedge

Question 118

What is a Fair Value Hedge?

Answer 118

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

• Excerpt from Accounting Standards Codification

Question 119

What is a Fair Value Hedge?

Fair Value Hedge

A ______ of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 119

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 120

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the _________ to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 120

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 121

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to _________ in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 121

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 122

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the ____ value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 122

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 123

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair _____ of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 123

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 124

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a __________ asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 124

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 125

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized _____ or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 125

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 126

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or _______,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 126

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 127

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an ____________ firm commitment, that are attributable to a particular risk.

Answer 127

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 128

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized ____ commitment, that are attributable to a particular risk.

Answer 128

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 129

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm ___________, that are attributable to a particular risk.

Answer 129

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 130

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are ____________ to a particular risk.

Answer 130

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 131

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular ____.

Answer 131

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 132

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a __________ risk.

Answer 132

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 133

What is a Fair Value Hedge?

Fair Value Hedge

A _____ of the __________ to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 133

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 134

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to ________ in the fair value of a recognized ____ or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 134

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 135

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a __________ asset or _______,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Answer 135

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 136

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an __________ firm ___________ , that are attributable to a particular risk.

Answer 136

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 137

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are ______________ to a particular ____.

Answer 137

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 138

What is a Fair Value Hedge?

Answer 138

What is a Fair Value Hedge?

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability,

or of an unrecognized firm commitment, that are attributable to a particular risk.

Question 139

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the _________

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Answer 139

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE*

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

*KPMG

Question 140

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from ________ in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Answer 140

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Question 141

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial ____ or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Answer 141

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Question 142

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or _______ (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Answer 142

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Question 143

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to _________ in a particular ____, such as interest rate risk on a fixed rate debt instrument.

Answer 143

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Question 144

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate ____ on a fixed rate debt instrument.

Answer 144

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Question 145

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed ____ debt instrument.

Answer 145

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Question 146

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to __________ or reduce the ________

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Answer 146

What is a Fair Value Hedge?

1. FAIR VALUE HEDGE

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure

that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Question 147

What type of hedging is this?

• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.

They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counterparty at a variable rate.

    o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge.

Answer 147

What type of hedging is this?

Answer: Fair Value Hedge

            Fixed rate --> Variable rate

• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.

They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counterparty at a variable rate.

    o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge.

Question 148

What type of hedging is this?

            Fixed rate --> Variable rate

Answer 148

What type of hedging is this?

            Fixed rate --> Variable rate

Answer: Fair Value Hedge

Question 149

What type of hedging is this?

An entity might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counterparty at a variable rate.

Answer 149

What type of hedging is this?

Answer: Fair Value Hedge

            Fixed rate --> Variable rate

• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.

They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counterparty at a variable rate.

    o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge.

Question 150

What type of hedging is this?

_____________ hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 150

What type of hedging is this?

Answer: Fair Value Hedge

            Fixed rate --> Variable rate

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 151

What type of hedging is this?

The hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 151

What type of hedging is this?

Answer: Fair Value Hedge

            Fixed rate --> Variable rate

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 152

The exposure to changes in fair value can result from a variety of causes including:

• holding a ____________,

Answer 152

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,

Question 153

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being __________ to purchase or sell something on predetermined terms

Answer 153

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to purchase or sell something on predetermined terms

Question 154

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to __________ or sell something on predetermined terms

Answer 154

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to purchase or sell something on predetermined terms

Question 155

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to purchase or ____ something on predetermined terms

Answer 155

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to purchase or sell something on predetermined terms

Question 156

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to purchase or sell something on predetermined _____

Answer 156

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to purchase or sell something on predetermined terms

Question 157

The exposure to changes in fair value can result from a variety of causes including:

• _______ a commodity,
• being committed to purchase or sell something on predetermined terms

Answer 157

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to purchase or sell something on predetermined terms

Question 158

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to ________ or ___ something on predetermined terms

Answer 158

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to purchase or sell something on predetermined terms

Question 159

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to purchase or sell something on ______________ terms

Answer 159

The exposure to changes in fair value can result from a variety of causes including:

• holding a commodity,
• being committed to purchase or sell something on predetermined terms

Question 160

The exposure to changes in fair value can result from a variety of causes including:

• issuing or __________ a financial instrument that has a fixed interest rate and maturity.

Answer 160

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 161

The exposure to changes in fair value can result from a variety of causes including:

• ________ or holding a financial instrument that has a fixed interest rate and maturity.

Answer 161

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 162

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial ___________ that has a fixed interest rate and maturity.

Answer 162

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 163

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a __________ instrument that has a fixed interest rate and maturity.

Answer 163

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 164

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a _____ interest rate and maturity.

Answer 164

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 165

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest ____ and maturity.

Answer 165

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 166

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and __________.

Answer 166

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 167

The exposure to changes in fair value can result from a variety of causes including:

• ________ or _______ a financial instrument that has a fixed interest rate and maturity.

Answer 167

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 168

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed ________ rate and maturity.

Answer 168

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 169

The exposure to changes in fair value can result from a variety of causes including:

• issuing or ________ a financial __________ that has a fixed interest rate and maturity.

Answer 169

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 170

The exposure to changes in fair value can result from a variety of causes including:

• ________ or holding a financial __________ that has a fixed interest rate and maturity.

Answer 170

The exposure to changes in fair value can result from a variety of causes including:

• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 171

Fair value hedges ________ existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 171

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 172

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The __________ to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 172

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 173

Fair value hedges protect existing ______, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 173

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 174

Fair value hedges protect existing assets, liabilities and firm commitments against ________ in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 174

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 175

Fair value hedges protect existing assets, liabilities and firm commitments against changes in ____ value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 175

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 176

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to ________ in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 176

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 177

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can _____ from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 177

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 178

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a ___________,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 178

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 179

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to __________ or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Answer 179

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 180

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a _____ interest rate and maturity.

Answer 180

Fair value hedges protect existing assets, liabilities and firm commitments against changes in fair value.

The exposure to changes in fair value can result from a variety of causes including

• holding a commodity,
• being committed to purchase or sell something on predetermined terms or
• issuing or holding a financial instrument that has a fixed interest rate and maturity.

Question 181

What type of hedging is this?

A ___________ Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Answer 181

What type of hedging is this?

Answer: Fair Value Hedge

A Fair Value Hedge is used when an entity is looking to eliminate or reduce the exposure that arises from changes in the fair value of a financial asset or liability (or other eligible exposure)

due to changes in a particular risk, such as interest rate risk on a fixed rate debt instrument.

Question 182

What type of hedging is this?

Measurement of Derivative Instrument

[ Change in Fair Value ] + / - –> Income Statement

Measurement of Hedge Item

[ Change in Fair Value + / - –> Income Statement
attributable to risk hedged ]

Answer 182

What type of hedging is this?

Answer: Fair Value Hedge

Measurement of Derivative Instrument

[ Change in Fair Value ] + / - –> Income Statement

Measurement of Hedge Item

[ Change in Fair Value + / - –> Income Statement
attributable to risk hedged ]

Question 183

What type of hedging is this?

An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.

They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counterparty at a fixed rate.

 o As a result, regardless of changes in the market interest rate, the entity will receive a steady and predictable stream of interest cash inflows.

Answer 183

What type of hedging is this?

Answer: Cash Flow Hedge

           Variable rate --> Fixed rate

An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.

They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counterparty at a fixed rate.

 o As a result, regardless of changes in the market interest rate, the entity will receive a steady and predictable stream of interest cash inflows.

Question 184

What type of hedging is this?

An entity might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counterparty at a fixed rate.

Answer 184

What type of hedging is this?

Answer: Cash Flow Hedge

           Variable rate --> Fixed rate

An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.

They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counterparty at a fixed rate.

 o As a result, regardless of changes in the market interest rate, the entity will receive a steady and predictable stream of interest cash inflows.

Question 185

What type of hedging is this?

Regardless of changes in the market interest rate, the entity will receive a steady and predictable stream of interest cash inflows.

Answer 185

What type of hedging is this?

Answer: Cash Flow Hedge

           Variable rate --> Fixed rate

An entity with a variable rate receivable may be concerned about the uncertainty of future cash inflows due to fluctuations in the interest rate.

They might enter into an interest rate swap in which they will pay out interest at a variable rate, to offset the interest received, and receive interest from the counterparty at a fixed rate.

 o As a result, regardless of changes in the market interest rate, the entity will receive a steady and predictable stream of interest cash inflows.

Question 186

What type of hedging is this?

An entity will always be paying the market rate of interest

and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge.

Answer 186

What type of hedging is this?

Answer: Fair Value Hedge

            Fixed rate --> Variable rate

• An entity with a fixed rate receivable may be concerned that fluctuations in interest rates will affect its fair value.

They might enter into an interest rate swap in which they will pay out interest at a fixed rate, to offset the interest received, and receive interest from the counterparty at a variable rate.

    o As a result, they will always be paying the market rate of interest and changes in the fair value of the note will be offset by changes in the fair value of the derivative used as a hedge.

Question 187

A cash flow hedge may also be used to __________ risk associated with a forecasted transaction.

Answer 187

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 188

A ____ flow hedge may also be used to transfer risk associated with a forecasted transaction.

Answer 188

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 189

A ____________ hedge may also be used to transfer risk associated with a forecasted transaction.

Answer 189

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 190

A cash flow hedge may also be used to transfer ____associated with a forecasted transaction.

Answer 190

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 191

A cash flow hedge may also be used to transfer risk associated with a ___________ transaction.

Answer 191

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 192

A cash flow hedge may also be used to transfer risk associated with a forecasted ___________.

Answer 192

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 193

A ______________ may also be used to transfer risk associated with a forecasted transaction.

Answer 193

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 194

A cash flow hedge may also be used to _____________ associated with a forecasted transaction.

Answer 194

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 195

A cash flow hedge may also be used to transfer risk associated with a ____________________.

Answer 195

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 196

A company planning to purchase goods or services from a foreign supplier may enter into a ________ exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 196

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 197

A company planning to purchase goods or services from a foreign supplier may enter into a forward __________ contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 197

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 198

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange __________

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 198

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 199

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a __________ in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 199

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 200

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the ____ flows associated with the transaction.

Answer 200

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 201

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely ______ the cash flows associated with the transaction.

Answer 201

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 202

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not ________ affect the cash flows associated with the transaction.

Answer 202

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 203

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash _______ associated with the transaction.

Answer 203

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 204

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows ___________ with the transaction.

Answer 204

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 205

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the ____________.

Answer 205

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 206

A company planning to _________ goods or services from a ________ supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 206

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 207

A company planning to purchase goods or ________ from a foreign __________ may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 207

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 208

A company planning to purchase goods or services from a foreign supplier may _____ into a _________ exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 208

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 209

A company planning to purchase goods or services from a foreign supplier may enter into a ______ exchange _________

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 209

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 210

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make _______ that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 210

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 211

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the _______ currency _________ rates does not adversely affect the cash flows associated with the transaction.

Answer 211

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 212

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign _________ exchange ______ does not adversely affect the cash flows associated with the transaction.

Answer 212

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 213

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the ____________ associated with the transaction.

Answer 213

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 214

A ____________ hedge may also be used to transfer risk associated with a forecasted transaction.

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 214

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 215

A cash flow hedge may also be used to __________ risk associated with a ________ transaction.

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Answer 215

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 216

A cash flow hedge may also be used to transfer risk associated with a forecasted ____________.

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the ____________.

Answer 216

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 217

What type of hedge may also be used to transfer risk associated with a forecasted transaction?

Answer 217

What type of hedge may also be used to transfer risk associated with a forecasted transaction?

Answer: A cash flow hedge

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 218

A company planning to purchase goods or services from a foreign supplier

may enter into what type of contract

to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction?

Answer 218

A company planning to purchase goods or services from a foreign supplier may enter into what type of contract to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction?

Answer: Forward Exchange Contract

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 219

How does a forward exchange contract help a company planning to purchase goods or services from a foreign supplier?

Answer 219

How does a forward exchange contract help a company planning to purchase goods or services from a foreign supplier?

Answer: A forward exchange contract helps a company to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

A company planning to purchase goods or services from a foreign supplier may enter into a forward exchange contract to make certain that a change in the foreign currency exchange rates does not adversely affect the cash flows associated with the transaction.

Question 220

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the ________ management must

Answer 220

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

Question 221

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) _________ the derivative as a hedge;

Answer 221

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;

Question 222

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the ___________ as a hedge;

Answer 222

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;

Question 223

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a _______;

Answer 223

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;

Question 224

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally __________ the hedging relationship,

Answer 224

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,

Question 225

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging ____________,

Answer 225

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,

Question 226

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) ________ document the hedging relationship,

Answer 226

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness; and
• 2) have the expectation that the hedge will be highly effective.

The auditor should gather evidence that management has met these requirements.

Question 227

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the _________ relationship,

Answer 227

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,

Question 228

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally __________ the _________ relationship,

Answer 228

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,

Question 229

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s _____ management strategy for using the hedge,

Answer 229

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge,

Question 230

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s risk _____________ strategy for using the hedge,

Answer 230

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge,

Question 231

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s risk management _________ for using the hedge,

Answer 231

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge,

Question 232

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s risk management strategy for using the _____,

Answer 232

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge,

Question 233

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally __________ the hedging relationship,
  the entity’s risk management _________ for using the hedge,

Answer 233

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge,

Question 234

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the ________ of assessing its effectiveness;

Answer 234

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness;

Question 235

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the method of __________ its effectiveness;

Answer 235

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the method of assessing its effectiveness;

Question 236

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the method of assessing its _____________;

Answer 236

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the method of assessing its effectiveness;

Question 237

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally ___________ the hedging relationship,
  the _________ of assessing its effectiveness;

Answer 237

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the method of assessing its effectiveness;

Question 238

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) __________ document the hedging relationship,
  the method of assessing its _______________;

Answer 238

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) formally document the hedging relationship,
  the method of assessing its effectiveness;

Question 239

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) __________ the derivative as a hedge;
  formally ________ the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness;

Answer 239

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness;

Question 240

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the ___________ as a hedge;
  formally document the _______ relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness;

Answer 240

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness;

Question 241

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the _________ as a hedge;
  formally document the hedging relationship,
  the entity’s risk management _________ for using the hedge, and
  the method of assessing its effectiveness;

Answer 241

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness;

Question 242

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s ____ management strategy for using the hedge, and
  the _________ of assessing its effectiveness;

Answer 242

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness;

Question 243

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness; and
• 2) have the ___________ that the hedge will be highly effective.

Answer 243

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness; and
• 2) have the expectation that the hedge will be highly effective.

Question 244

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 2) have the expectation that the _____ will be highly effective.

Answer 244

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 2) have the expectation that the hedge will be highly effective.

Question 245

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 2) have the expectation that the hedge will be highly ________.

Answer 245

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 2) have the expectation that the hedge will be highly effective.

Question 246

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 2) have the expectation that the hedge will be ______ effective.

Answer 246

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 2) have the expectation that the hedge will be highly effective.

Question 247

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 2) ____ the ___________ that the hedge will be highly effective.

Answer 247

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 2) have the expectation that the hedge will be highly effective.

Question 248

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 2) have the expectation that the hedge will be _______ ___________.

Answer 248

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 2) have the expectation that the hedge will be highly effective.

Question 249

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) _________ the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness; and
• 2) have the __________ that the hedge will be highly effective.

Answer 249

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness; and
• 2) have the expectation that the hedge will be highly effective.

Question 250

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its _____________; and
• 2) have the expectation that the hedge will be highly ________ .

Answer 250

What management must perform in order to apply hedge accounting to a derivative instrument?

In order to apply hedge accounting to a derivative instrument, at the inception management must

• 1) designate the derivative as a hedge;
  formally document the hedging relationship,
  the entity’s risk management strategy for using the hedge, and
  the method of assessing its effectiveness; and
• 2) have the expectation that the hedge will be highly effective.

Question 251

What does the evidence that the auditor obtains for fair value hedges should support?

Answer 251

What does the evidence that the auditor obtains for fair value hedges should support?

• For fair value hedges, the auditor should obtain evidence

to support the recorded change in the hedged item that is attributable to the hedged risk.

Question 252

What type of hedge may be used to transfer risk associated with a forecasted transaction?

Answer 252

What type of hedge may be used to transfer risk associated with a forecasted transaction?

Answer: A cash flow hedge

A cash flow hedge may also be used to transfer risk associated with a forecasted transaction.

Question 253

In order to apply hedge accounting to a derivative instrument,

at the inception management must

____________________________

Answer 253

In order to apply hedge accounting to a derivative instrument,

at the inception management must
designate the derivative as a hedge

Question 254

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the ____________

that is attributable to the hedged risk.

Answer 254

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 255

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the ______________.

Answer 255

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 256

For __________ hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Answer 256

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 257

For fair value hedges,

the auditor should obtain evidence to support the recorded _______ in the hedged item

that is attributable to the hedged risk.

Answer 257

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 258

For fair value hedges,

the _______ should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Answer 258

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 259

For fair value hedges,

the auditor should obtain _________ to support the recorded change in the hedged item

that is attributable to the hedged risk.

Answer 259

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 260

For fair value hedges,

the auditor should obtain evidence to ________ the recorded change in the hedged item

that is attributable to the hedged risk.

Answer 260

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 261

For fair value hedges,

the auditor should obtain evidence to support the _________ change in the hedged item

that is attributable to the hedged risk.

Answer 261

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 262

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged _____

that is attributable to the hedged risk.

Answer 262

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 263

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged ____.

Answer 263

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 264

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is ____________ to the hedged risk.

Answer 264

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 265

For fair value _______,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Answer 265

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 266

For fair value hedges,

the auditor should obtain evidence to support

____________________________________

Answer 266

For fair value hedges,

the auditor should obtain evidence to support the recorded change in the hedged item

that is attributable to the hedged risk.

Question 267

For a ____ flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Answer 267

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 268

For a cash flow _____ of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Answer 268

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 269

For a cash flow hedge of a forecasted __________,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Answer 269

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 270

For a cash flow hedge of a __________ transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Answer 270

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 271

For a cash flow hedge of a forecasted transaction,

the _______ should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Answer 271

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 272

For a cash flow hedge of a forecasted transaction,

the auditor should obtain __________ that supports management’s determination

that the forecasted transaction will probably occur.

Answer 272

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 273

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that _________ management’s determination

that the forecasted transaction will probably occur.

Answer 273

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 274

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports _____________’s determination

that the forecasted transaction will probably occur.

Answer 274

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 275

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Answer 275

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 276

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the ___________ transaction will probably occur.

Answer 276

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 277

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted ___________ will probably occur.

Answer 277

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 278

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably _____.

Answer 278

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 279

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will _________ occur.

Answer 279

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 280

For a _________ hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Answer 280

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 281

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports ______________’s _______________

that the forecasted transaction will probably occur.

Answer 281

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 282

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction ____ probably occur.

Answer 282

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 283

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the ___________ _____________ will probably occur.

Answer 283

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 284

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports

_________________________________

Answer 284

For a cash flow hedge of a forecasted transaction,

the auditor should obtain evidence that supports management’s determination

that the forecasted transaction will probably occur.

Question 285

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include __________:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Answer 285

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 286

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Regarding the ___________ of similar past transactions.

Answer 286

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Regarding the frequency of similar past transactions.

Question 287

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Regarding the frequency of similar ____ transactions.

Answer 287

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Regarding the frequency of similar past transactions.

Question 288

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Regarding the frequency of _______ past transactions.

Answer 288

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Regarding the frequency of similar past transactions.

Question 289

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Regarding the frequency of similar past _____________.

Answer 289

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Regarding the frequency of similar past transactions.

Question 290

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the entity’s ______ to execute the transaction.

Answer 290

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the entity’s ability to execute the transaction.

Question 291

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the _____’s ability to execute the transaction.

Answer 291

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the entity’s ability to execute the transaction.

Question 292

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the entity’s ability to ______ the transaction.

Answer 292

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the entity’s ability to execute the transaction.

Question 293

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the entity’s ability to execute the ____________.

Answer 293

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the entity’s ability to execute the transaction.

Question 294

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Indicating the ____ that might result if the transaction does not occur.

Answer 294

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Indicating the loss that might result if the transaction does not occur.

Question 295

For a cash flow hedge of a forecasted transaction, support may include evidence:

o __________ the loss that might result if the transaction does not occur.

Answer 295

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Indicating the loss that might result if the transaction does not occur.

Question 296

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Indicating the loss that might _____ if the transaction does not occur.

Answer 296

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Indicating the loss that might result if the transaction does not occur.

Question 297

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Indicating the loss that might result if the ___________ does not occur.

Answer 297

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Indicating the loss that might result if the transaction does not occur.

Question 298

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Indicating the loss that might result if the transaction does not _____.

Answer 298

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Indicating the loss that might result if the transaction does not occur.

Question 299

For a cash flow hedge of a __________ transaction, the auditor should obtain evidence that supports management’s determination that the _________ transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Answer 299

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Question 300

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s ___________ that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Answer 300

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Question 301

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the ___________ of similar ____ transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Answer 301

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Question 302

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of _____ past ____________.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Answer 302

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Question 303

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the _____’s ability to ________ the transaction.

o Indicating the loss that might result if the transaction does not occur.

Answer 303

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Question 304

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s _______ to execute the __________.

o Indicating the loss that might result if the transaction does not occur.

Answer 304

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Question 305

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the ____ that might _____ if the transaction does not occur.

Answer 305

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Question 306

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the ____ that might result if the transaction does not ____.

Answer 306

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Question 307

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does ___ occur.

Answer 307

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Question 308

For a __________ hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Answer 308

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

Question 309

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different ___________ might be used to achieve the same business purpose.

Answer 309

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 310

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the _________ that substantially different transactions might be used to achieve the same business purpose.

Answer 310

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 311

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially ________ transactions might be used to achieve the same business purpose.

Answer 311

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 312

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be ____ to achieve the same business purpose.

Answer 312

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 313

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be used to achieve the ____ business purpose.

Answer 313

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 314

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be used to achieve the same business _______.

Answer 314

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 315

For a cash flow hedge of a __________ transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Answer 315

For a cash flow hedge of a forecasted transaction, support may include evidence:

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 316

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

o Supporting the ___________ that substantially different transactions might be used to achieve the same business purpose.

Answer 316

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 317

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

o Supporting the likelihood that substantially different ___________ might be used to achieve the same business purpose.

Answer 317

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 318

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

o Supporting the likelihood that substantially different transactions might be used to _______ the same business purpose.

Answer 318

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 319

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

o Supporting the likelihood that substantially different transactions might be ____ to achieve the same business purpose.

Answer 319

For a cash flow hedge of a forecasted transaction, the auditor should obtain evidence that supports management’s determination that the forecasted transaction will probably occur.

Support may include evidence:

o Regarding the frequency of similar past transactions.

o Supporting the entity’s ability to execute the transaction.

o Indicating the loss that might result if the transaction does not occur.

o Supporting the likelihood that substantially different transactions might be used to achieve the same business purpose.

Question 320

Most testing related to Property, plant, and equipment transactions

concerns itself with the ___________ types of controls that reduce the risk of misstatement.

Answer 320

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Question 321

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of _________ that reduce the risk of misstatement.

Answer 321

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Question 322

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that ______ the risk of misstatement.

Answer 322

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Question 323

Most ________ related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Answer 323

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Question 324

Most testing related to Property, plant, and equipment transactions

concerns itself with the different _____ of controls that reduce the risk of misstatement.

Answer 324

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Question 325

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the ____ of misstatement.

Answer 325

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Question 326

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of _____________.

Answer 326

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Question 327

Most testing related to Property, plant, and equipment ______________

concerns itself with the different types of controls that reduce the risk of misstatement.

Answer 327

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Question 328

Most testing related to _________, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Answer 328

Most testing related to Property, plant, and equipment transactions

concerns itself with the different types of controls that reduce the risk of misstatement.

Question 329

In a good internal control __________,

the internal audit staff will periodically inspect physical assets.

Answer 329

In a good internal control structure,

the internal audit staff will periodically inspect physical assets.

Question 330

In a good internal _______ structure,

the internal audit staff will periodically inspect physical assets.

Answer 330

In a good internal control structure,

the internal audit staff will periodically inspect physical assets.

Question 331

In a good internal control structure,

the internal ____ staff will periodically inspect physical assets.

Answer 331

In a good internal control structure,

the internal audit staff will periodically inspect physical assets.

Question 332

In a good internal control structure,

the _________ audit staff will periodically inspect physical assets.

Answer 332

In a good internal control structure,

the internal audit staff will periodically inspect physical assets.

Question 333

In a good internal control structure,

the internal audit staff will periodically _______ physical assets.

Answer 333

In a good internal control structure,

the internal audit staff will periodically inspect physical assets.

Question 334

In a good internal control structure,

the internal audit staff will ___________ inspect physical assets.

Answer 334

In a good internal control structure,

the internal audit staff will periodically inspect physical assets.

Question 335

In a good internal control structure,

the internal audit staff will periodically inspect physical _______.

Answer 335

In a good internal control structure,

the internal audit staff will periodically inspect physical assets.

Question 336

In a good internal control structure,

the internal audit staff will periodically inspect ________ assets.

Answer 336

In a good internal control structure,

the internal audit staff will periodically inspect physical assets.

Question 337

In a good internal control structure,

the internal audit _____ will periodically inspect physical assets.

Answer 337

In a good internal control structure,

the internal audit staff will periodically inspect physical assets.

Question 338

In a ____ internal control structure,

the internal audit staff will periodically inspect physical assets.

Answer 338

In a good internal control structure,

the internal audit staff will periodically inspect physical assets.

Question 339

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes ___________, disposals and depreciation expense.

Answer 339

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 340

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, __________ and depreciation expense.

Answer 340

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 341

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Answer 341

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 342

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation _______.

Answer 342

Most testing related to Property, plant, and equipment transactions concerns itself with the different types of controls that reduce the risk of misstatement.

In a good internal control structure, the internal audit staff will periodically inspect physical assets.

This cycle includes acquisitions, disposals and depreciation expense.

Question 343

Among testing the objectives related to PPE are:

Answer 343

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets. This can assist in identifying unrecorded disposals.
• Verifying the completeness of acquisitions by Tracing from the physical assets to the records. This can assist in identifying unrecorded acquisitions.

Question 344

Among testing the objectives related to PPE are:

• Verifying the ___________ of recorded assets
• Verifying the completeness of acquisitions

Answer 344

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the completeness of acquisitions

Question 345

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the ____________ of acquisitions

Answer 345

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the completeness of acquisitions

Question 346

Among testing the objectives related to PPE are:

• Verifying the existence of _________ assets
• Verifying the completeness of acquisitions

Answer 346

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the completeness of acquisitions

Question 347

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the completeness of ____________

Answer 347

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the completeness of acquisitions

Question 348

Among testing the objectives related to PPE are:

• Verifying the existence of recorded _______
• Verifying the completeness of acquisitions

Answer 348

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the completeness of acquisitions

Question 349

Among testing the objectives related to PPE are:

• Verifying the _________ of recorded _______
• Verifying the completeness of acquisitions

Answer 349

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the completeness of acquisitions

Question 350

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the ____________ of ___________

Answer 350

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the completeness of acquisitions

Question 351

Among testing the objectives related to PPE are:

• _______ the existence of recorded assets
• _______ the completeness of acquisitions

Answer 351

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets
• Verifying the completeness of acquisitions

Question 352

How an auditor verify the EXISTENCE of recorded assets related to property, plant, and equipment?

Answer 352

How an auditor verify the EXISTENCE of recorded assets related to property, plant, and equipment?

Answer:

        Vouching (back) Record   -->   Physical Assets

Verifying the existence of recorded assets

by Vouching from records to the physical assets.
This can assist in identifying unrecorded disposals.

Among testing the objectives related to PPE are:

• Verifying the existence of recorded assets by Vouching from records to the physical assets. This can assist in identifying unrecorded disposals.

Question 353

How an auditor verify the EXISTENCE of recorded assets related to property, plant, and equipment?

by _________ from _______ to the _____________.

Answer 353

How an auditor verify the EXISTENCE of recorded assets related to property, plant, and equipment?

Answer:

        Vouching (back) Record   -->   Physical Assets

Verifying the existence of recorded assets

by Vouching from records to the physical assets.
This can assist in identifying unrecorded disposals.

Question 354

How an auditor verify the EXISTENCE of recorded assets related to property, plant, and equipment?

by

Answer 354

How an auditor verify the EXISTENCE of recorded assets related to property, plant, and equipment?

Answer:

        Vouching (back) Record   -->   Physical Assets

Verifying the existence of recorded assets

by Vouching from records to the physical assets.
This can assist in identifying unrecorded disposals.

Question 355

How an auditor verify the EXISTENCE of recorded assets related to property, plant, and equipment?

by vouching or tracing?

Answer 355

How an auditor verify the EXISTENCE of recorded assets related to property, plant, and equipment?

Answer:

        Vouching (back) Record   -->   Physical Assets

Verifying the existence of recorded assets

by Vouching from records to the physical assets.
This can assist in identifying unrecorded disposals.

Question 356

How an auditor identify unrecorded disposals related to property, plant, and equipment?

Answer 356

How an auditor identify unrecorded disposals?

Answer:

        Vouching (back) Record   -->   Physical Assets

Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

Question 357

How an auditor identify unrecorded disposals related to property, plant, and equipment?

by vouching or tracing?

Answer 357

How an auditor identify unrecorded disposals?

Answer:

        Vouching (back) Record   -->   Physical Assets

Verifying the existence of recorded assets by Vouching from records to the physical assets.

This can assist in identifying unrecorded disposals.

Question 358

How an auditor verify the COMPLETENESS of acquisitions related to property, plant, and equipment?

Answer 358

How an auditor verify the COMPLETENESS of acquisitions related to property, plant, and equipment?

Answer:

        Tracing Physical Assets --> Records   

Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

Question 359

How an auditor verify the COMPLETENESS of acquisitions related to property, plant, and equipment?

by vouching or tracing?

Answer 359

How an auditor verify the COMPLETENESS of acquisitions related to property, plant, and equipment?

Answer:

        Tracing Physical Assets --> Records   

Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.
This can assist in identifying unrecorded acquisitions.

Question 360

How an auditor identify unrecorded acquisitions related to property, plant, and equipment?

Answer 360

How an auditor identify unrecorded acquisitions?

Answer:

        Tracing Physical Assets --> Records   

Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.
This can assist in identifying unrecorded acquisitions.

Question 361

How an auditor identify unrecorded acquisitions related to property, plant, and equipment?

by vouching or tracing?

Answer 361

How an auditor identify unrecorded acquisitions?

Answer:

        Tracing Physical Assets --> Records   

Verifying the completeness of acquisitions
by Tracing from the physical assets to the records.

This can assist in identifying unrecorded acquisitions.

Question 362

What is a common problem involves the recording of equipment purchases?

Answer 362

What is a common problem involves the recording of equipment purchases?

Answer: Recording of equipment purchases in expense accounts,
especially for repairs and maintenance.

Question 363

What is a common problem involves the recording of equipment purchases?

A common problem involves
the recording of equipment purchases in _________ accounts,

Answer 363

What is a common problem involves the recording of equipment purchases?

Answer: A common problem involves
the recording of equipment purchases in expense accounts,
especially for repairs and maintenance.

Question 364

What is a common problem involves the recording of equipment purchases?

A common problem involves
the _________ of equipment purchases in expense accounts,

Answer 364

What is a common problem involves the recording of equipment purchases?

A common problem involves
the recording of equipment purchases in expense accounts,
especially for repairs and maintenance.

Question 365

What is a common problem involves the recording of equipment purchases?

A common problem involves
the recording of equipment ____________ in expense accounts,

Answer 365

What is a common problem involves the recording of equipment purchases?

A common problem involves
the recording of equipment purchases in expense accounts,
especially for repairs and maintenance.

Question 366

What is a common problem involves the recording of equipment purchases?

A common problem involves
the recording of equipment purchases in expense accounts,
especially for ______ and maintenance.

Answer 366

What is a common problem involves the recording of equipment purchases?

A common problem involves
the recording of equipment purchases in expense accounts,
especially for repairs and maintenance.

Question 367

What is a common problem involves the recording of equipment purchases?

A common problem involves
the recording of equipment purchases in expense accounts,
especially for repairs and __________ .

Answer 367

What is a common problem involves the recording of equipment purchases?

A common problem involves
the recording of equipment purchases in expense accounts,
especially for repairs and maintenance.

Question 368

What is the account that the recording of equipment purchases was usually mistakenly recorded into?

Answer 368

What is the account that the recording of equipment purchases was usually mistakenly recorded into?

Answer: Expense accounts

Question 369

Large variances may indicate the expensing of _____ that should have been capitalized.

Answer 369

Large variances may indicate the expensing of costs that should have been capitalized.

Question 370

Large variances may indicate the expensing of costs that should have been __________.

Answer 370

Large variances may indicate the expensing of costs that should have been capitalized.

Question 371

Large __________ may indicate the expensing of costs that should have been capitalized.

Answer 371

Large variances may indicate the expensing of costs that should have been capitalized.

Question 372

Why the internal audit staff may examine the relevant accounts and compare them with budgeted amounts, related to property, plant, and equipment?

Answer 372

Why the internal audit staff may examine the relevant accounts and compare them with budgeted amounts, related to property, plant, and equipment?

Answer: Since large variances may indicate the expensing of costs that should have been capitalized.

Besides the tracing of physical assets to records mentioned above, the internal audit staff may also examine the relevant accounts and compare them with budgeted amounts, since large variances may indicate the expensing of costs that should have been capitalized.