Misstatements & Concepts a. The client failed to include in their financial statements inventory that was consigned to others. b. The client had a significant amount of damaged goods that were presented at cost. C. The client failed to describe in the financial statements significant debt restrictions. d. The client recorded receivables that were fictitious. e. The client recorded year-end sales in the subsequent year. f. The client included in their financial statements inventory that was on consignment from vendor. g. In directional testing, vouching from ledgers to source documents most directly addresses this assertion. h. In directional testing, tracing from source documents to journals most directly addresses this assertion. i. The assertion most directly related to the "did it all get included." j. The assertion most directly related to the question of ownership of an asset. Assertions

Misstatements & Concepts a. The client failed to include in their financial statements inventory that was consigned to others. b. The client had a significant amount of damaged goods that were presented at cost. C. The client failed to describe in the financial statements significant debt restrictions. d. The client recorded receivables that were fictitious. e. The client recorded year-end sales in the subsequent year. f. The client included in their financial statements inventory that was on consignment from vendor. g. In directional testing, vouching from ledgers to source documents most directly addresses this assertion. h. In directional testing, tracing from source documents to journals most directly addresses this assertion. i. The assertion most directly related to the "did it all get included." j. The assertion most directly related to the question of ownership of an asset. Assertions

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter6: A Framework For Audit Evidence

Section: Chapter Questions

Problem 32MCQ

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Similar questions

Which of the following is not a reason for the physical inventory count to differ from what is recognized on the companys books? A. mismanagement B. shrinkage C. damage D. sale of services to customers
Fraudulent reporting by management could include a. Fictitious revenues from a fake customer. b. Improper asset valuation. c. Mismatching revenues and expenses. d. All of the above.
The likelihood that material misstatements may have entered the accounting system and notbeen detected and corrected by the client’s internal control is referred to asa. Inherent risk.b. Control risk.c. Detection risk.d. Risk of material misstatement.
which of the following regarding errors is correct Select one: a. intentional misstatement of the financial statements, b. misappropriation of assets is an kind of errors c. a mistake in recording the date of a sale invoice is an example of the errors d. it is more difficult for the auditor to detect because it is not intentional
Identify the two methods of evaluating the performance materiality of uncorrected misstatements. What are the requirements of Staff Accounting Bulletin No. 108 for evaluating the performance materiality of these misstatements?
S1. Operational risk, as opposed to efficiency, is the risk of loss resulting from inadequate internal processes, people, and systems or from external events. S2. FS audit is concerned on to see that the credit control has been strictly followed while operational audit is concerned on to study the credit control system for suggesting better measures as necessary. Which of the following statements is/are false?
a) Assume auditor has found that the clients inventory becomes obsolete very quickly. Will the auditor set inherent risk high or low? Also explain after setting the inherent risk what additional measures auditor can take regarding audit of inventory in this case. b) Materiality is a relative rather than absolute concept."- explain this statement with an example. c) Though preparing engagement letter is not mandatory for an auditor, audit firms prepare engagement letter. Why?
An item or information is said to be material if misstatement of which can influence the ___ a. Auditor's decision b. Audit committee's decision c. User's decision d. Management decision
According to Professional Judgment, one of the environmental factors affecting judgment is the "rush to solve" judgement trap. Briefly describe the trap and how it applies to the situation affecting the recording of the sales transaction.
A client’s purchasing system ends with the recording of a liability and its eventual payment. Which of the following best describes auditors’ primary concern with respect to liabilities resulting from the purchasing system?a. Accounts payable are not materially understated.b. Authority to incur liabilities is restricted to one designated person.c. Acquisition of materials is not made from one vendor or one group of vendors.d. Commitments for all purchases are made only after established competitive bidding procedures are followed.
What are the requirements of Staff Accounting Bulletin No. 108 for evaluating the performance materiality of these misstatements?
Under IFRS, the retrospective approach should not be used if: a. retrospective application requires assumptions about management's intent in a prior period. b. the company does not have trained staff to perform the analysis. c. the effects of the change have counterbalanced. d. the effects of the change have not counterbalanced.