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 6RQ
To determine
Explain the difference between the quality of the evidence for the accounts receivables and accounts payable.
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the auditor is planning to use accounts payable confirmations when auditing the client's accounts payable. The use of accounts payable confirmations will test which of the following assertions?
a. rights and obligations
b. existence (only)
c. existence and completeness
d. cutoff
Why is it more important to search for unrecorded notes payablethan for unrecorded notes receivable? Suggest audit procedures that the auditor can useto uncover unrecorded notes payable.
To gather audit evidence related to accounts receivable, the client should mail the confirmation requests.
TRUE OR FALSE? WHY?
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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- What is the process of confirming accounts receivable balances. Why is it important for auditors to understand revenue recognition rules?arrow_forwardAuditors 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.arrow_forward1. 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_forward
- if the auditor want to assure that Receivables have not been sold. What assertion he or she want to test : Select one: a. Existence b. Completeness c. Rights and obligations d. Valuation and allocationarrow_forwardWhy is it important to emphasize the existence assertion when auditing accounts receivable?arrow_forwardChoose the one correct answer. Sending accounts receivable confirmation letters to the client's customers is consistent with the auditor's objective of validating client's receivable assertion on: A. Completeness and rightsb.Completeness and valuationc. E xistence and rightsd. Existence and valuatione. None of the abovearrow_forward
- Sending accounts receivable confirmation letters to the client's customers is consistent with the auditor's objective of validating client's receivable assertion on: A. Completeness and rightsb.Completeness and valuationc. E xistence and rightsd. Existence and valuatione. None of the abovearrow_forwardAn auditor's techniques for examining the balance sheet's accounts receivable account are most likely to concentrate on management's claim ofarrow_forwardWhy are the confirmation of payables is not a required audit procedure as it is with receivables?arrow_forward
- Confirmations of bank accounts may help the auditor to determine if material amounts of accounts receivable have been sold to the bank on a recourse basis. True Falsearrow_forwardMULTIPLE CHOICE: 1. Which of the following may be considered to be a primary objective of the auditor in the examination of accounts receivable? A. Establish validity and collectability of receivables B. Determine the approximate time of collectability of receivables C. Determine the relationship of receivables to sales D. Determine the reasonableness of the sales amount 2. Which of the following is not a procedure used by an auditor in the examination of accounts receivable? A. Confirmation B. Reconciliation C. Inquiry D. Physical count and inspection 3. In determining 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 4. Which of the following…arrow_forwardThe typical procedures performed to verify that the client has not omitted any amounts from the payables balance include: Select one: a. performing confirmations of payables accounts b. performing analytical review procedures c. vouching recorded payables to supporting documentation d. subsequent payments testingarrow_forward
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