Day 2 End Quiz

Question 1

What is the difference between outstanding checks and unreleased checks?

Outstanding checks are checks released but not yet cleared with the bank while unreleased checks are checks drawn and recorded but are not actually issued or delivered to the payees as of year end

Outstanding checks are checks that are still with the Company as of year end while unreleased checks are checks released but not yet cleared with the bank as of year end

All of the above

Answer 1

Outstanding checks are checks released but not yet cleared with the bank while unreleased checks are checks drawn and recorded but are not actually issued or delivered to the payees as of year end

Question 2

Which of the following is the best audit procedure for determining the existence of unrecorded liabilities?

Examine selected cash disbursements in the period subsequent to year-end.

Examine a sample of invoices a few days prior to and subsequent to year-end to ascertain whether they have been properly recorded.

Examine confirmation requests returned by creditors whose accounts appear on a subsidiary trial balance of accounts payable.

Examine unusual relationships between monthly accounts payable balances and recorded purchases.

Answer 2

Examine selected cash disbursements in the period subsequent to year-end.

Question 3

The auditor attends the year end inventory count. Which assertion will they be looking to address? (Please select all that apply)

Completeness and Cut-off

Existence and Occurrence

Accuracy, Valuation, and Allocation

Rights and Obligations

Answer 3

Completeness and Cut-off

Existence and Occurrence

Accuracy, Valuation, and Allocation

Question 4

The least likely approach in auditing management’s estimate relating to an accrued liability is to:

Independently develop an estimate of the amount to compare to management’s estimate

Send confirmations relating to the estimate

Review and test management’s process of developing the estimate

None of the above

Answer 4

Send confirmations relating to the estimate

Question 5

It is not necessary to obtain bank confirmations when passbooks or bank statements are already checked.

True

False

Answer 5

False

Question 6

When there are difference noted in the accounts receivable confirmation replies, the auditor should:

Immediately treat the difference as an audit issue for adjustment

Communicate the difference noted with the client and perform additional procedures as necessary

None of the above

Answer 6

Communicate the difference noted with the client and perform additional procedures as necessary

Question 7

Based on the prior year audit, not all customers replied to the accounts receivable confirmation. For this year’s audit procedures, the auditor should not perform accounts receivable confirmation procedure as this would just be a waste of time.

True

False

Answer 7

False

Question 8

Performing ratio analysis is a mandatory procedure per GAM 315.

True

False

Answer 8

False

Question 9

Preliminary Analytical Review forms part of audit fieldwork.

True

False

Answer 9

False

Question 10

Which audit assertions are relevant to fixed assets? (Please select all that apply.)

Completeness

Accuracy

Existence

Rights and obligations

Cut off

Occurrence

Valuation

Answer 10

Existence

Rights and obligations

Valuation