Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 11, Problem 36JOQ
To determine
Identify the assertion which most likely addressed when a sample of shipping documents are compared with related sales invoices.
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Which assertion is most likely being tested when an auditor vouches transactions from the sales Journal to the sales orders?
a. cutoff
b. rights
c. completeness
d. accuracy
Audit tests include tests of controls and substantive procedures. Substantive procedures can be divided into substantive analytical procedures, tests of balances, tests of transactions and tests of disclosures.Required:For each test in the table below, select the type of audit test it represents. 1.Examine the financial report to determine whether all related party loans are properly presented2.Recalculate depreciation figure3.Trace sales recorded in the sales journal to shipping documents4.Examine sales invoices for initials to indicate that prices and extensions have been checked5.Check the cost of closing inventory to subsequent sales prices6.Confirm loan balances with financial institutions
10.
The inspection of a vendor's invoice by the auditors is:
Select one:a. Direct evidence about occurrence of a transactionb. Part of the client's accounting systemc. Documentary evidence about occurrence of a transactiond. Physical evidence about occurrence of a transact
Chapter 11 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 11 - Explain the difference between a customers order...Ch. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - State briefly the objective of the billing...Ch. 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. 20RQCh. 11 - Prob. 21RQCh. 11 - Prob. 22RQCh. 11 - Give an example of a type of receivable...Ch. 11 - Prob. 24RQCh. 11 - Prob. 25QRACh. 11 - Prob. 26QRACh. 11 - Prob. 27QRACh. 11 - Prob. 28QRACh. 11 - Prob. 29QRACh. 11 - Prob. 30QRACh. 11 - Prob. 31QRACh. 11 - Prob. 32QRACh. 11 - Prob. 33QRACh. 11 - Prob. 34QRACh. 11 - Prob. 35QRACh. 11 - Prob. 36AOQCh. 11 - Which of the following would provide the most...Ch. 11 - Prob. 36COQCh. 11 - Prob. 36DOQCh. 11 - Prob. 36EOQCh. 11 - Under SEC rules, which of the following is not...Ch. 11 - Prob. 36GOQCh. 11 - Prob. 36HOQCh. 11 - Prob. 36IOQCh. 11 - Prob. 36JOQCh. 11 - Prob. 36KOQCh. 11 - Prob. 36LOQCh. 11 - Prob. 37OQCh. 11 - Prob. 38OQCh. 11 - An auditors working papers include the following...Ch. 11 - Prob. 40OQCh. 11 - Prob. 41OQCh. 11 - Prob. 42OQCh. 11 - Prob. 43OQCh. 11 - Prob. 44PCh. 11 - Prob. 45PCh. 11 - Prob. 46PCh. 11 - Prob. 47PCh. 11 - The July 31, 20X0, general ledger trial balance of...Ch. 11 - Prob. 49ITCCh. 11 - Prob. 50ECCh. 11 - Prob. 51EC
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- Which of the following audit procedures represent a substantive test of transaction that would validate managements assertion on occurrence of a purchase transaction a. Comparing the classification of the transaction based on the supplier's invoice with the company’s chart of accounts. b. Recalculation of the supplier's invoice to check its mathematical accuracy. c. Reviewing and scanning of the purchases journal for large or unusual amounts. d. Tracing from the file of receiving reports to the purchases journalarrow_forwardWhich of the following frames would best enable an auditor to test a sales/receivables system to determine that receivables are supported by all required documentation ? (a) Customer list (b) Sales invoice log Sales order log (d) Shipping logarrow_forwardIn the audit of accounts receivable, the most important emphasis should be on thea. Completeness assertion.b. Existence assertion.c. Rights and obligations assertion.d. Presentation and disclosure assertionarrow_forward
- Which of the following audit procedures probably would provide the most reliable evidence related to the entity’s assertion of rights and obligations for the inventory account?a. Trace test counts noted during physical count to the summarization of quantities.b. Inspect agreements for evidence of inventory held on consignment.c. Select the last few shipping advices used before the physical count and determine whether the shipments were recorded as sales.d. Inspect the open purchase order file for significant commitments to consider for disclosure.arrow_forward1. Explain the basic processes involved in documenting revenue transactions as a part of the audit on sales. 2.arrow_forwardState one test of control and one substantive test of transactions that the auditor can use to verify the following sales transaction-related audit objective: Recorded sales are stated at the proper amounts.arrow_forward
- 1. Which of the following may be considered to be primary objective of the auditor in the examination of accounts receivables? a. Determine the approximate time of collectability of receivables b. Determine the relationship of receivables to sales c. Determine the reasonableness of the sales figure d. Establish validity and collectability of receivables 2. In determining the validity of accounts receivable, which of the following would the auditor consider most reliable? a. Direct telephone communication between the auditor and debtor b. Confirmation replies received directly from customers c. Credits to accounts receivable from the cash receipts book after the close of business at year end d. Documentary evidence that supports the accounts receivable balance 3. An auditor should perform alternative procedures to substantiate the existence of accounts receivable when a. Pledging of the receivables is probable b. No reply to a negative confirmation request is received c. No reply to a…arrow_forwardList the transaction-related audit objectives for the audit of salestransactions. For each objective, state one internal control that the client can use toreduce the likelihood of misstatementsarrow_forwardYour audit client is under intense pressure to meet an earnings target. Which transaction assertion for purchases is most at risk. Occurrence Accuracy Completeness Classificationarrow_forward
- Audit tests include tests of controls and substantive procedures. Substantive procedures can be divided into substantive analytical procedures, tests of balances, tests of transactions and tests of disclosures. Required: For each test in the table below, select the type of audit test it represents. Test Type of test 1 Examine the financial report to determine whether all related party loans are properly presented 2 Recalculate depreciation figure 3 Trace sales recorded in the sales journal to shipping documents 4 Examine sales invoices for initials to indicate that prices and extensions have been checked 5 Check cost of closing inventory to subsequent sales prices 6 Confirm loan balances with financial institutions You are the audit senior on the audit of Marsa Ltd, a large manufacturing company, for the year ended 30 June 2020. It is now 16 July 2020 and you are reviewing the audit working papers…arrow_forwardIndicate a specific audit procedure under each of the following categories, as applied particularly in the sales and collection cycle.a. test of controlb. substantive test of transactionsc. substantive test of account balancesarrow_forwardChoose the one correct answer In auditing the client’s receivables, the auditor decided to select entries in the sales journal and trace them back to the sales invoice, delivery receipt and the sales order. This procedure is consistent in corroborating which of the following assertion? * A. ValuationB. ExistenceC. CompletenessD. Rights and Obligationse. None of the abovearrow_forward
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