Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 12, Problem 34BOQ
To determine
Identify the appropriate answer related to the comparison of the physical verification and the recording in the books.
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An auditor would vouch inventory on the inventory status report to the vendor’s invoice toobtain evidence concerning management’s balance assertions abouta. Existence.b. Rights and obligations.c. Completeness.d. Valuation
the auditor picks an item of inventory from the warehouse and determines whether it is included in the entity's list of inventories
a. existence
b. completeness
c. accuracy
d. rights
An audit trail allows you to trace a source document to its final effect on the financial statements or vice versa.Describes what the audit trail would be for an inventory purchase.
Chapter 12 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 12 - Prob. 1RQCh. 12 - Explain the significance of the purchase order to...Ch. 12 - What segregation of duties would you recommend to...Ch. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - When perpetual inventory records are maintained,...
Ch. 12 - What is meant by a bill and hold scheme?Ch. 12 - What charges and credits may be disclosed in the...Ch. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - A well-prepared balance sheet usually includes a...Ch. 12 - Darnell Equipment Company uses the LIFO method of...Ch. 12 - Prob. 17RQCh. 12 - Prob. 18RQCh. 12 - Prob. 19RQCh. 12 - Prob. 20RQCh. 12 - Prob. 21QRACh. 12 - Prob. 22QRACh. 12 - Prob. 23QRACh. 12 - Prob. 24QRACh. 12 - Prob. 25QRACh. 12 - Prob. 26QRACh. 12 - Prob. 27QRACh. 12 - Grandview Manufacturing Company employs standard...Ch. 12 - Prob. 29AOQCh. 12 - Prob. 29BOQCh. 12 - The document issued by a common carrier...Ch. 12 - Which of the following should be included as a...Ch. 12 - Prob. 29EOQCh. 12 - Prob. 29FOQCh. 12 - Instead of taking a physical inventory count on...Ch. 12 - Prob. 29HOQCh. 12 - Prob. 29IOQCh. 12 - Prob. 29JOQCh. 12 - Prob. 29KOQCh. 12 - Prob. 29LOQCh. 12 - Prob. 30OQCh. 12 - Adapted AICPA Task-Based Simulation For each of...Ch. 12 - Prob. 32OQCh. 12 - Prob. 33OQCh. 12 - Prob. 34AOQCh. 12 - Prob. 34BOQCh. 12 - Prob. 34COQCh. 12 - Prob. 34DOQCh. 12 - Prob. 34EOQCh. 12 - Prob. 35OQCh. 12 - Prob. 36PCh. 12 - Prob. 37PCh. 12 - Prob. 38PCh. 12 - Prob. 39PCh. 12 - Prob. 40PCh. 12 - Prob. 41PCh. 12 - Prob. 42PCh. 12 - Prob. 43ITCCh. 12 - Prob. 44ECCh. 12 - Western Trading Company is a sole proprietorship...
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- An auditor selected items for test counts from the client’s warehouse during the physical inventory observation. The auditor then traced these test counts into the detailed inventory listing that agreed to the financial statements. This procedure most likely provided evidence concerning management’s assertion ofa. Rights and obligations.b. Completeness.c. Existence.d. Valuation.arrow_forwardAn auditor most likely would analyze inventory turnover rates to obtain evidence concerning management’s balance assertions abouta. Existence.b. Rights and obligations.c. Completeness.d. Valuation and allocation.arrow_forwardAn auditor selected items for test counts while observing a client’s physical inventory. The auditor then traced the test counts to the client’s inventory listing. This procedure most likely obtained evidence concerning management’s balance assertion ofa. Rights and obligations.b. Completeness.c. Existence.d. Valuation and allocationarrow_forward
- what are the audit asssertions related to inventory?arrow_forwardA D REQUIRED: IDENTIFY THE ASSERTION[S] RELATED TO EACH AUDIT PROCEDURE ASSERTION[S] E= existence C=Completeness A=Accuracy Cl=Classification Cu=Cutoff V=Valuation RO=Rights & Procedure Obligations A Compare sales invoices with customer purchase orders В Compare selected items on the inventory list with the physical inventory.arrow_forwardAnalyze some common internal controls over inventories. Explain the significant inherent risks associated with inventory. Explain the process of physical inventory counts and the auditor’s observation of this process.arrow_forward
- The auditor observes the client's inventory test counts and locates the items on the client's inventory listing to test for which of the following financial statement assertions? 1. Completeness. 2. Rights and obligations. 3. Allocation and valuation. 4. Understandability and classification. O 1 O 2 O 3 O 4arrow_forwardWhich of the following management assertions is an auditor most likely testing if the audit objective states that all inventory on hand is reflected in the ending inventory balance?a. The entity has rights to the inventory.b. Inventory is properly valued.c. Inventory is properly presented in the financial statements.d. Inventory is completearrow_forwardA B D. REQUIRED: IDENTIFY THE ASSERTION[S] RELATED TO EACH AUDIT PROCEDURE ASSERTION[S] E=existence C-Completeness A=Accuracy Cl=Classification Cu=Cutoff V=Valuation RO-Rights & Obligations Procedure A Compare sales invoices with customer purchase orders B Compare selected items on the inventory list with the physical inventory.arrow_forward
- Explain the parts of the audit of the inventory cycle.arrow_forwardwhat work will an auditor carry out prior to the commencement of the inventory count.arrow_forwardWhich of the following is a substantive test in relation to completeness? a.Inspect physical inventory, checking from physical stock to inventory records. b.Enquire of management and scan inventory records to identify any obsolete, excess or slow-moving inventory. c.Inspect physical inventory, checking from inventory records to physical stock. d.Recalculate depreciation or depletion calculations.arrow_forward
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