Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 14, Problem 33GOQ
To determine
Identify the appropriate answer related to the approach related to the confirmation of the accounts payable.
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An auditor is likely to perform each of the below procedures to obtain evidence regarding the potential understatement of accounts payable at year-end (i.e., the Completeness assertion) except…
Question options:
Inspect purchase orders and receiving reports for accounts payable recorded at year-end.
Inspect the open invoice file for invoices to be paid after year-end.
All options describe procedures that can be used to identify a potential understatement of accounts payable.
Analyze cash disbursements made during the first few weeks of the subsequent year and inspect supporting documentation for each disbursement.
Auditors try to identify predictable relationships when using analytical procedures.
Relationships involving transactions from which of the following accounts would most
likely yield the highest level of evidence?
a. Accounts receivable.
O b. Interest expense.
O c. Travel and entertainment expense.
O d. Accounts payable.
In order to determine whether accounts payable are understated, auditors wish to obtain a sample of purchase transactions from suppliers and how they were recorded in the accounting books.
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,
sampling is the best mechanism to obtain this type of samples. a
.
discovery b
.
attributes c
.
random digits d
.
variables
Chapter 14 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 14 - If a corporation overstates its earnings, are its...Ch. 14 - Prob. 2RQCh. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - List the major responsibilities of an accounts...Ch. 14 - Prob. 10RQ
Ch. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - Prob. 13RQCh. 14 - Prob. 14RQCh. 14 - Prob. 15RQCh. 14 - Prob. 16RQCh. 14 - Prob. 17RQCh. 14 - Whitehall Company records its liabilities in an...Ch. 14 - Prob. 19RQCh. 14 - Prob. 20RQCh. 14 - Prob. 21RQCh. 14 - Prob. 22RQCh. 14 - What is the purpose of the auditors review of cash...Ch. 14 - Prob. 24RQCh. 14 - Prob. 25RQCh. 14 - Prob. 26RQCh. 14 - Prob. 27QRACh. 14 - Prob. 28QRACh. 14 - Prob. 29QRACh. 14 - Prob. 30QRACh. 14 - Prob. 31QRACh. 14 - Prob. 32QRACh. 14 - Which of the following procedures is least likely...Ch. 14 - Prob. 33BOQCh. 14 - Which of the following is the best audit procedure...Ch. 14 - Prob. 33DOQCh. 14 - Prob. 33EOQCh. 14 - Prob. 33FOQCh. 14 - Prob. 33GOQCh. 14 - Prob. 33HOQCh. 14 - Ordinarily, the most significant assertion...Ch. 14 - Prob. 33JOQCh. 14 - Prob. 33KOQCh. 14 - Prob. 33LOQCh. 14 - Prob. 34OQCh. 14 - Prob. 35OQCh. 14 - Prob. 36OQCh. 14 - Prob. 37OQCh. 14 - Prob. 38PCh. 14 - Prob. 39PCh. 14 - Prob. 40PCh. 14 - Prob. 41PCh. 14 - Prob. 42PCh. 14 - Prob. 43ITC
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- Auditors try to identify predictable relationships when using analytical procedures. Relationshiipss involvingtransactions fromwhich of the following accounts most likely would yield the highest level of evidence? a. accounts receivable b. interest expense c. accounts payable d. Travel and entertainment expensearrow_forwardAn example of an analytical procedure is the comparison of Results of a statistical sample with the expected characteristics of the actual population. O Computer generated data with similar data generated by a manual accounting system. Recorded amounts of major disbursements with appropriate invoices. O Financial information with similar information regarding the industry in which the entity operates.arrow_forwardof stion For a sample of sales transactions selected from the sales journal, verify that the amount of the transaction has been recorded in the correct customer account in the accounts receivable subledger. Choose the Audit Objective: Choose the specific audit objective →arrow_forward
- Answer all parts. Part C is part of the 9-21 questionarrow_forwardFor which of the following tests would an auditor most likely use attribute sampling?(1) Selecting accounts receivable for confirmation of account balances.(2) Inspecting employee time cards for proper approval by supervisors.(3) Making an independent estimate of the amount of a LIFO inventory.(4) Examining invoices in support of the valuation of fixed asset additions.arrow_forwardAn auditor is reviewing transactions in an expense account. The dollar amounts are 118, 140, 133, 167, 171, 158, and 145. Construct a 90% confidence interval for the average transaction amount.arrow_forward
- What's the best option?arrow_forwardWhen applying analytical procedures during an audit, which of the following is the best approach for developing expectations? Multiple Choice Considering the pattern of several unusual changes without trying to explain what caused them. Considering unaudited account balances and ratios to calculate what adjusted balances should be. Comparing client data with client determined expected results to reduce detailed tests of account balances. Comparing current year account balances to balances of one or more comparable periods.arrow_forwardV4. Hayden Corporation uses an enterprise resource planning (ERP) system. In their audit of receivables and revenues, the auditors have identified the following data elements in the corporation’s database that may be used for data analytics applications: Customer balance Customer credit limit and credit rating Customer total annual sales Customer purchases by date Customer returns by date Customer name Customer shipping address Required: a. Describe two data analytic applications that might be used to audit the existence of receivables and occurrence of sales. b. Describe one data analytic application that might be used to audit the valuation of receivables.arrow_forward
- Management Assertions. Your audit manager has asked you to explain the PCAOB assertions by using an account on the balance sheet at your audit client. For the accounts receivable account, please define each of the PCAOB assertions, using the accounts receivableaccount as a way to illustrate each assertion. You are encouraged to reference Exhibit 1.5 tohelp you answer this questionarrow_forwardusing a sample Third-Party Accounts Receivable Report attached a.Describe how data are utilized by an organization in healthcare audits. Consider the following: Which data are important to a revenue-cycle audit? How are the different components of the accounts receivable report used to inform an auditb. b. Describe how to establish parameters for collecting benchmarking data in healthcare audits. Consider the following: How do you determine which data are appropriate for benchmarking? What should you consider when setting parameters for benchmark data?arrow_forwardDetermine the following as a result of your audit:a. What is the correct balance of the accounts receivable as of June 30, 2022? b. What is the balance of the allowance for bad debts as of June 30, 2022? c. What is the balance of bad debts expense in its income statement for year ended June 30, 2022?arrow_forward
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