Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 11, Problem 27DQP
a.
To determine
Identify the transactions-related management assertion in the AICPA auditing standards to which misstatement pertains.
b.
To determine
Identify the automated control that may prevent each misstatement.
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Students have asked these similar questions
If an employee skims sales from a customer, which of the following will likely occur?
a. The stolen payment if not material, will not be noticed by the organization.
b. The receivable will become past due
C. The customer will not be able to show proof that payment has been made.
O d. The organization is likely to notice the theft of the payment immediately.
Provide an appropriate response based on the following scenarios.
Assume that the accounting clerk posts a customer’s payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented?
Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented?
Which of the following is an example of fraudulent financial reporting?
a. The treasurer diverts customer payments to his personal due, concealing his
actions by debiting an expense account, thus overstating expenses.
O b. An employee steals inventory and the "shrinkage" is recorded in cost of goods
sold.
O c. Company management changes inventory count tags and overstates ending
inventory, while understating cost of goods sold.
O d. An employee steals small tools from the company and neglects to return them;
the cost is reported as a miscellaneous operating expense.
Chapter 11 Solutions
Auditing And Assurance Services
Ch. 11 - Prob. 1RQCh. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - Prob. 4RQCh. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQ
Ch. 11 - Prob. 11RQCh. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. 16RQCh. 11 - Prob. 17RQCh. 11 - Prob. 18RQCh. 11 - Prob. 19RQCh. 11 - Prob. 20.1MCQCh. 11 - Actions, policies, and procedures that reflect the...Ch. 11 - Prob. 20.3MCQCh. 11 - Prob. 21.1MCQCh. 11 - Prob. 21.2MCQCh. 11 - Prob. 21.3MCQCh. 11 - Prob. 22.1MCQCh. 11 - Prob. 22.2MCQCh. 11 - Which of the following correctly describes an...Ch. 11 - Prob. 23DQPCh. 11 - Prob. 24DQPCh. 11 - The following are misstatements that have occurred...Ch. 11 - Prob. 26DQPCh. 11 - Prob. 27DQPCh. 11 - Prob. 28DQPCh. 11 - Prob. 29DQPCh. 11 - Prob. 30DQPCh. 11 - Prob. 31DQPCh. 11 - Prob. 32C
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- 1. SEGREGATION OF FUNCTIONS to the AR department, which adjusts the customer Which, if any, of the following situations represents improper segregation of functions? Explain your accounts to reflect the return. answer. a. The billing department prepares the customers' invoices and records the sale in the sales journal. b. Mail room clerk opens cash receipts envelopes from customers and also prepares the remittance list. c. Accounting clerk receives journal vouchers from various departments and also posts to the GL accounts. d. The sales department approves sales credit memos as the result of product returns and forwards thesearrow_forwardThe billing department prepares the customers' invoices and records the sale in the sales journal, is this considered improper segregation of functions, why or why not?arrow_forwardA fraudulent sales order was prepared by an order entry clerk in an attempt to steal merchandise from an organization. This fraud would most likely be detected by: Question 6 options: Using pre-numbered sales orders. Verifying that the sales order has been prepared correctly. Requiring that all sales orders by supported by an approved customer purchase order. Proper segregation of duties.arrow_forward
- 1. What does it mean to say that internal control has limitations and what are these limitations? 2. Provide an appropriate response based on the following scenarios. Assume that the accounting clerk posts a customer’s payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented? Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented? 3. What is petty cash and what purpose(s) does it serve? 4. What types of controls should be in place to make sure people in the office don't just take from petty cash (for their own personal use) whenever they feel like it? In your opinion, what is an appropriate amount to have in petty cash? 5. Prepare the necessary journal entries for each of the following: (a) On March 1, issued a check to establish a petty cash fund of $1,410 (b)…arrow_forwardWhich of the following are external threats to revenue security? (select all that apply) A guest who walks out before the bill is presented An employee using voided sales to steal cash A quick-change artist A guest who forgot to payarrow_forwardWhich of the following statements is not true regarding revenue recognition regarding gift cards? A. "Breakage" refers to the unused portion of gift card balances B. "Breakage" can only be recognized as revenue to the extent that it is probable a reversal will not be necessary. C. It is typical that a portion of gift card sales will go unused by customers.arrow_forward
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