Audit 3

Question 1

Days Sales in Accounts Receivable?

Answer 1

AR/ (Sales /365)

Question 2

Inventory Turnover?

Answer 2

CGS/Average Inventory (Beg Inv + End Inv /2)

Question 3

Ending Inventory?

Answer 3

Beg Inv + Purchases - CGS

Question 4

Incorrect Acceptance Down

Answer 4

Sample Size bigger

Question 5

Which is more predictable? Balance Sheet or Inc Statement?

Answer 5

Income statement is more predictable for auditor

Question 6

When do analytical procedures’ expectation and procedures performed have to be documented?

Answer 6

Only during audit when being used as substantive tests, not in the review stage

Question 7

Attribute Sampling is used:

Answer 7

To test characteristics of each item in a sample, usually IC

Question 8

Variables Testing is used:

Answer 8

To test whether an account balance is reasonable

Question 9

A/R Turnover Ratio:

Answer 9

Sales/AR

Question 10

Is it ok when confirmation states that they’re not responsible for info?

Answer 10

Yes

Question 11

Precision:

Answer 11

Possible error in each direction

Question 12

Upper Deviation Rate:

Answer 12

Sample Deviation Rate + Allowance for Sampling Risk

Question 13

More relying on things means more risk, which leads to:

Answer 13

Sample size decreases