Deck 5

Question 1

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

Answer 1

completeness

Question 2

Testing credit approval before shipping goods to customers tests the????assertion

Answer 2

valuation/allocation

Question 3

1) existence; (2) completeness; (3) rights or obligations; and (4) valuation and allocation….these are????

Answer 3

4 assertions applicable to account balances at the period end:

Question 4

Prior months’ bank statements obtained from the client provides the least assurance about?

Answer 4

reliability

Question 5

A client’s accounting data cannot be considered sufficient audit evidence to support the financial statements?

Answer 5

true dat

Question 6

An effective internal control structure provides more assurance about the reliability of evidential matter.

Answer 6

evidential matter

Question 7

ufficient and appropriate documentation should include evidence that the audit documentation has been

Answer 7

reviewed.

Question 8

An auditor’s documentation should

Answer 8

Show that the accounting records agree or reconcile with the financial statements.

Question 9

The current file of an auditor’s documentation most likely would include a copy of the

Answer 9

bank rec

Question 10

It is appropriate to use calculator tapes with names or explanations on the tapes, rather than writing separate lists into the audit ????

Answer 10

documentation.

Question 11

The working ?????would NOT appear in the permanent file. It is normally included in the current year audit documentation.

Answer 11

trial balance

Question 12

The quantity and content of an auditor’s documentation would least likely be affected by the content of the ????

Answer 12

representation letter.

Question 13

Unreturned negative confirmation requests rarely provide ?????.

Answer 13

significant explicit evidence.

Question 14

The confirmation of customers’ accounts receivable rarely provides reliable evidence about the completeness assertion because

Answer 14

Customers may not be inclined to report understatement errors in their accounts.

Question 15

To reduce the risks associated with accepting fax responses to requests for confirmations of accounts receivable, an auditor most likely would

Answer 15

Verify the sources and contents of the faxes in telephone calls to the senders.

Question 16

the use of the negative form of accounts receivable confirmation most likely be justified when ?

Answer 16

A small number of accounts may be in dispute and the accounts receivable balance arises from sales to many customers with small balances.

Question 17

In evaluating the reasonableness of an accounting estimate, an auditor most likely would concentrate on key factors and assumptions that are

Answer 17

Deviations from historical patterns.

Question 18

Which of the following procedures would an auditor ordinarily perform first in evaluating management’s accounting estimates for reasonableness?

Answer 18

Obtain an understanding of how management developed its estimates.

Question 19

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?

Answer 19

eview the lawyer’s letter for information about litigation.

Question 20

When auditing material for fair value measurements and disclosures do not….

Answer 20

Performing tests of control to evaluate the effectiveness of controls affecting the fair value measurements.

Question 21

When there are no observable market prices, the auditor is not obligated to consider whether

Answer 21

Management’s selection of a specialist is appropriate for the audit engagement.