An auditor is skeptical about the assertion on the salary expenses. He collected information on the number of employees, categories of employees, their pay scales to estimate the amount of salary expenses. In this case the auditor is considering: a. Relationship between financial and non- financial information O b. Anticipated results of the entity O c. Comparable information from previous period o d. Similar industry information

An auditor is skeptical about the assertion on the salary expenses. He collected information on the number of employees, categories of employees, their pay scales to estimate the amount of salary expenses. In this case the auditor is considering: a. Relationship between financial and non- financial information O b. Anticipated results of the entity O c. Comparable information from previous period o d. Similar industry information

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A client uses percentages of aging categories to calculate the allowance for doubtful accounts. When auditing the allowance for doubtful accounts, the auditor must… Question 4 options: Ensure that the client’s aging categories are consistent with industry averages. Ensure that the client has calculated the allowance for the current and all prior years using the same percentages for uncollectible accounts. Perform tests to ensure that the aging categories are accurate. Perform tests to ensure that management has not exercised judgment when calculating the allowance for doubtful accounts.
Assume that you are an auditor of a company. Explain any THREEcategories of assertions that you will be testing when auditing the financialstatements of the company. You are required to:(i.) Mention the name of the company you will be auditing along with the industryto which it belongs to. (ii.) List the category of assertions (3 assertions) along with the element ofa financial statement that will be checked. (iii.) Explain in detail the procedure adopted for collecting the audit evidence thatyou have mentioned in relation to question no. (ii.) with proper justification andtwo sample transactions.
which of the following application would an auditor apply to determine the probability of a corporation's account balance being in error? A) overinvolvement rations B) probability rules C) bayes theorem D) emprical formula
A portion of fees earned by a CPA but not due until completion of an audit is what type of adjustment A. Prepaid expense B. Unearned revenue C. Accrued asset D. Accrued liability
Which of the following documentary evidence is considered ? the most reliable Select one a. Written policies and procedures b. Vendor invoices c. Letters from outside attorneys d . Employee time sheets
What is the main purpose of information presented in notes to the financial statements? • To provide disclosures required by generally accepted accounting principles. To correct improper presentation in the financial statements. To provide recognition of amounts not included in the totals of the financial statements. To present management's responses to auditor comments.
Which of the following is incorrect? A. Non-assurance engagement include agree-upon procedures, compilation of financial or other information and tax consulting B. Assurance service report on the quality of information C. All engagements perform by the professional accountant are assurance engagement D. Assurance engagement encompass attestation engagement
do family firms need audit ? explain what do we mean by auditors considering various risks related to the like hood to the material misstatement in the financial statement ? explain with examples
Which of the following can be used as a fundamental source of information in an audit? a. Money in the safe b. Oral testimony of the person responsible for accounting c. An e-mail from a supplier d. None e. Income statement
While reviewing a work paper on “pre-paid expenses” an auditor noticed that the schedule prepared by the audit team gave the opening balance, debits to the account, credits to the account and closing balance. Is the same sufficient documentation?
Under which of the following circumstances may member May charge a client a contingent fee? Group of answer choices a. May audits ABC Co. and wishes to charge it a contingent fee for the audit work. b. May audits ABC Co. and wishes to charge it a contingent fee for separate consulting work. c. May is examining prospective financial information for XYZ Co. and wishes to charge it a contingent fee for unrelated consulting services. d. May prepares TUV Co.’s tax returns and wishes to charge it a contingent fee for nontax consulting services.
please answer with reason