Deck 5 Flashcards
An auditor would most likely review an entity’s periodic accounting for the numerical sequence of shipping documents and invoices to support management’s financial statement assertion of
completeness
Testing credit approval before shipping goods to customers tests the????assertion
valuation/allocation
1) existence; (2) completeness; (3) rights or obligations; and (4) valuation and allocation….these are????
4 assertions applicable to account balances at the period end:
Prior months’ bank statements obtained from the client provides the least assurance about?
reliability
A client’s accounting data cannot be considered sufficient audit evidence to support the financial statements?
true dat
An effective internal control structure provides more assurance about the reliability of evidential matter.
evidential matter
ufficient and appropriate documentation should include evidence that the audit documentation has been
reviewed.
An auditor’s documentation should
Show that the accounting records agree or reconcile with the financial statements.
The current file of an auditor’s documentation most likely would include a copy of the
bank rec
It is appropriate to use calculator tapes with names or explanations on the tapes, rather than writing separate lists into the audit ????
documentation.
The working ?????would NOT appear in the permanent file. It is normally included in the current year audit documentation.
trial balance
The quantity and content of an auditor’s documentation would least likely be affected by the content of the ????
representation letter.
Unreturned negative confirmation requests rarely provide ?????.
significant explicit evidence.
The confirmation of customers’ accounts receivable rarely provides reliable evidence about the completeness assertion because
Customers may not be inclined to report understatement errors in their accounts.
To reduce the risks associated with accepting fax responses to requests for confirmations of accounts receivable, an auditor most likely would
Verify the sources and contents of the faxes in telephone calls to the senders.
the use of the negative form of accounts receivable confirmation most likely be justified when ?
A small number of accounts may be in dispute and the accounts receivable balance arises from sales to many customers with small balances.
In evaluating the reasonableness of an accounting estimate, an auditor most likely would concentrate on key factors and assumptions that are
Deviations from historical patterns.
Which of the following procedures would an auditor ordinarily perform first in evaluating management’s accounting estimates for reasonableness?
Obtain an understanding of how management developed its estimates.
Which of the following procedures most likely would assist an auditor in determining whether management has identified all accounting estimates that could be material to the financial statements?
eview the lawyer’s letter for information about litigation.
When auditing material for fair value measurements and disclosures do not….
Performing tests of control to evaluate the effectiveness of controls affecting the fair value measurements.
When there are no observable market prices, the auditor is not obligated to consider whether
Management’s selection of a specialist is appropriate for the audit engagement.
