Signs The Checks Last

In auditing plant assets and accumulated depreciation for proper valuation, the auditor
shoulddo all except the following:

Physically inspect major plant assets additions.
Mailing disbursement checks and remittance advices should be controlled by the employee
who
Signs the checks last.
Which of the following audit procedures would be least likely to lead the auditor to find
unrecorded fixed asset disposals?
Review of repairs and maintenance expense.
If a company’s external auditor

expresses an unqualified opinion
as a result of the audit of the
company’s financial statements,
readers of the audit report can
assume that
a. The external auditor found no
fraud.
b. The company is financial sound
and the financial statements are
accurate.
c. Internal control is effective.
d. All material disagreements
between the company and external
auditor about the application
of accounting principles were
resolved in the satisfaction of the
external auditor
assume that
fraud.
accurate.
external auditor
assume that
fraud.
accurate.
external auditor
If a company’s external auditor expresses and unqualified opinion as a result of an audit
All materials disagreements…
Negative confirmation of accounts receivable is less effective than positive confirmation of

accounts receivable because
the auditor can not infer that all nonrespondents have verified their account
information.
An auditor who is engaged to examine the financial statements of a business enterprise will
request a cutoff bank statement primarily in order to:
Verify reconciling items on the client's bank reconciliation
Proper authorization procedures in the revenue cycle usually provide for approval of write-
offs by an employee in which
Treasurer
An auditor ordinarily sends a standard confirmation request to all banks with which the client
has done business during the year under audit, regardless of the year-end balance. A purpose
of this procedure is to
Seek information about contingent liab..
which of the following events after the reporting period will be lease likely to result in an
adjusment to the financial statements
Material changes in quoted price
which of the following may be considered to be a primary objective of the auditor in the
examination of accounts receivable
In which of the following circumstances would an auditor most likely add an emphasis-of-
matter paragraph to the report while not affecting the auditor's unmodified opinion?
There is substantial doubt about the entity's ability to continue as a going concern.
When auditing prepaid insurance, an auditor discovers that the original insurance policy on
plant equipment is notavailable for inspection. The policy's absence most likely indicates the
possibility of a (an):
Lien on the plant equipment
An auditor who has confirmed accounts receivable may discover that the sales journal was
held open past year end if
Most of the returned positive confirmation requests indicate that the debtor owes a
smaller balance than the amount being confirmed
A client maintains two bank accounts.

Draw check for at least 100 on bank b for deposit in bank a. Record the receipt but not
the disbursement…
Which of the following procedures would an auditor most likely rely on to verify
management’s assertions of completeness?
Comparing a sample of shipping documents to related sales invoices.
Purchase cutoff procedures test the completeness assertion. should include goods in its
inventory if it: (a) Has sold the goods. (b) Has paid for the goods. (c) Holds legal title to the
goods. (d) Has physical possession of the goods.
In auditing investments for proper valuation, the auditor should do all butthe following:
a.Confirm securities held in safekeeping off the client'spremises
An aged trial balance of accounts receivable is usually used by the auditor to:
evaluate the provision for bad debts
The auditor finds situation in which one person has the ability to collect receivables, make
deposits, issue credit memos and record receipt of payments. The auditor suspects the
individual may be stealing from cash receipts. Which of the following audit procedures would
be most effective in discovering fraud in this scenario?
Perform, a detailed review of debits to customer discounts, sales returns, or other debit
accounts, excluding cash posted to the cash receipts journal.
Which of the following sets of information does an auditor usually confirm on one form?
Cash in bank and collateral for loans
Which of the following combinations of procedures would an auditor most likely perform to
obtain evidence about fixed asset additions?
A. Inspecting documents and physically examining assets
Which is incorrect regarding valuation and disclosure of long-term investments?

If market quotations exceed the carrying amounts, the auditor would consider whether
a writedown is required.
The purpose of tests of controls over shipping is to determine whether

b. Shipments are billed.
to test the accuracy of the current year's depreciation changes, an auditor should rely most
heavily on
Recomputation…
When obtaining evidence regarding litigation against a client, the CPA will be lest
interested in determining
An estimate of when the matter will be resolved
in auditor testing long-term investments would ordinarily use analytical review as the
primary audit procedure to ascertain the reasonableness of the:
a. Completeness of recorded investment income
An internal auditor noted that several shipments were not billed. To prevent recurrence of
such nonbilling, the organization should
Numerically sequence and independently account for all controlling documents (such as
packing slips and shipping orders) when sales journal entries are recorded
There are three categories..
Completeness
user's confidence in the financial statments is enhanced

When an unmodified opinion is expressed
To determine whether accounts payable are complete, an auditor performs a test to verify
that all merchandise received is recorded. The population of documents for this test cosists of
all
Receiving reports
Which of the following techniques is most likely to result in sufficient information with regard
to an engagement to review the quantity of fixed assets on hand in a particular department?
a. physical observation
In a properly designed internal accounting control system, the same employee may be
permitted to
sign checks and also cancel supporting documents
the expression financial statements, taken as a whole

Equally to a complete financial statements and to an individual financial statement
.To determine whether internal control operates effectively to minimize errors of failure to
bill a customer for a shipment, the auditor would select a sample of transactions from the
population represented by the
a. Shipping records file
The primary purpose of sending a standard confirmation request to financial institutions with
which the client has done business during the year is to
Corroborate information regarding deposit and loan balances
In a properly designed accounts payable system, a voucher is prepared after the invoice,
purchase order, requisition, and receiving report are verified. The next step in the system is
to
Entering of the voucher into the voucher register
No reservation
Unqualified opinion
When an auditor is unable to inspect and count a client's investment securities until after the
balance sheet date, the bank where the securities are held in a safe-deposit box should be
notified on or before the balance sheet date that it will be asked to
Confirm that there has been no access to the box between the balance sheet date and
the security-count date.
the auditor should use positive confirmation of accounts receivable
when the possibility of disputes…

Signs The Checks Last

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In auditing plant assets and accumulated depreciation for proper valuation, the auditor

shoulddo all except the following:

If a company’s external auditor

Negative confirmation of accounts receivable is less effective than positive confirmation of

A client maintains two bank accounts.

Which is incorrect regarding valuation and disclosure of long-term investments?

The purpose of tests of controls over shipping is to determine whether

user's confidence in the financial statments is enhanced

the expression financial statements, taken as a whole

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