Auditing And Assurance Services
Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 19, Problem 18.1MCQ
To determine

Identify the option that represents weakness in internal control over property, plant and equipment

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CAATs Application—PP&E. You are supervising the audit fieldwork of Sparta Springs Company and need certain information from Sparta’s equipment records, which are maintained on a computer file. The particular information is (1) net book value of assets so that your assistant can reconcile the subsidiary ledger to the general ledger control accounts (the general ledger contains an account for each asset type at each plant location) and (2) sufficient data to enable your assistant to find and inspect selected assets. The record layout of the master file follows:Asset number.Description.Asset type.Location code.Year acquired.Cost.Accumulated depreciation, end of year (includes accumulated depreciation at the beginning of the year plus depreciation for year to date).Depreciation for the year to date.Useful life.From the data file described earlier,a. List the information needed to verify correspondence of the subsidiary detail records with the general ledger accounts. Does this work…
Which of the following is a device designed to help the audit team obtain evidence about theaccounting and control activities of an audit client?a. A narrative memorandum describing the control system.b. An internal control questionnaire.c. A flowchart of the documents and procedures used by the company.d. All of the above
When processing controls within the accounting information system may not leave visible evidence that could be inspected by audit teams, the teams shoulda. Make corroborative inquiries.b. Observe the separation of duties of personnel.c. Review transactions submitted for processing and compare them to related output.d. Review the run manual.
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