Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 24, Problem 22.3MCQ
To determine
Investment and property schedules are presented for purposes of additional analysis in a document outside the basic financial statements. The schedules are not required supplementary information. To identify the measurement of materiality, when the auditor is engaged to report on whether the supplementary information is fairly stated in relation to the audited financial statement as a whole.
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In substantive procedures, why is the emphasis on the completeness assertion for liabilities instead of on the existence assertion as in the audit of assets?
In testing the existence assertion for an asset, an auditor ordinarily works from the
a. Potentially unrecorded items to the financial statements.
O b. Financial statements to the potentially unrecorded items.
O c. Supporting evidence to the accounting records.
O d. Accounting records to the supporting evidence.
According to auditing standards, financial statements presented on a special-purpose framework should nota. Contain a note describing the special-purpose framework.b. Describe in general how the special-purpose framework differs from generally acceptedaccounting principles.c. Be accompanied by an audit report that gives an unmodified opinion with reference tothe special-purpose framework.d. Contain a note with a quantified dollar reconciliation of the assets based on the specialpurpose framework with the assets based on generally accepted accounting principles.
Chapter 24 Solutions
Auditing And Assurance Services
Ch. 24 - Prob. 1RQCh. 24 - Explain why an auditor is interested in a clients...Ch. 24 - Prob. 3RQCh. 24 - Prob. 4RQCh. 24 - Prob. 5RQCh. 24 - Prob. 6RQCh. 24 - Prob. 7RQCh. 24 - Prob. 8RQCh. 24 - What major considerations should the auditor take...Ch. 24 - Identify five audit procedures normally done as a...
Ch. 24 - Prob. 11RQCh. 24 - Prob. 12RQCh. 24 - Prob. 13RQCh. 24 - Prob. 14RQCh. 24 - Prob. 15RQCh. 24 - Prob. 16RQCh. 24 - Prob. 17RQCh. 24 - Prob. 18RQCh. 24 - Prob. 19RQCh. 24 - Prob. 20.1MCQCh. 24 - Prob. 20.2MCQCh. 24 - Prob. 20.3MCQCh. 24 - Prob. 21.1MCQCh. 24 - Prob. 21.2MCQCh. 24 - Prob. 21.3MCQCh. 24 - Prob. 22.1MCQCh. 24 - Prob. 22.2MCQCh. 24 - Prob. 22.3MCQCh. 24 - Prob. 23.1MCQCh. 24 - Prob. 23.2MCQCh. 24 - Prob. 23.3MCQCh. 24 - Prob. 24DQPCh. 24 - Prob. 25DQPCh. 24 - Prob. 26DQPCh. 24 - Prob. 28DQPCh. 24 - Prob. 29DQPCh. 24 - Prob. 32DQPCh. 24 - Prob. 33DQP
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- Which of the following best describes the independent auditor's approach to obtaining satisfaction concerning depreciation expense in the income statement? a.Review the mathematical accuracy of the amounts charged to income as a result of depreciation expens b.Determine the method of computing depreciation expense and ascertain that it is in accordance with generally accepted accounting principle c.Support the basis of depreciable assets and the depreciation expens d.Reconcile the amount of depreciation expense to those amounts credited to accumulated depreciation account e.Select a sample of equipment items in the manufacturing facility and vouch back to the recorded subsidiary ledge r.s.e.s.e.ry ledger.arrow_forwardThe auditing procedure that could least likely lead the auditor to find unrecorded property, plant, and equipment disposals isA. Vouching purchase invoices for asset additions.B. Review of voucher for the payment of property taxes.C. Review of miscellaneous income accountD. Review of loan agreement for fixed assets used as collateralE. None of themarrow_forwardWhich of the following audit procedures will apply to obtain the reliable audit evidence relating to the existence of tangible assets? O a. Reperformance O b. Confirmation O c. Inspection O d. Recalculationarrow_forward
- Which of the following audit objectives is to validate the assertion of classification? * A. Investment income is included on the statement of comprehensive income at the appropriate amount B. Income statement related items are appropriately recorded in the proper accounts in the statement of comprehensive income C. The entity owns, or has a legal right to the investments included on the statement of financial position D. Investments and related investment income accounts are properly classified described and disclosed in the financial statements, including notes, in accordance with the applicable PFRSarrow_forwardThe following are auditor's primary substantive procedures in auditing investments, except: * A. Assessing potential future investments B. Verifying existence and ownership of securities C. Investigating current and potential impairments of investments D. Reviewing appropriateness of presentation and adequacy of disclosurearrow_forwardWhich of the following is least likely to be appropriate as the basis for determining the preliminary judgment about materiality in the audit of financial statements? revenues losses assets current liabilitiesarrow_forward
- Which of the following audit procedures is least appropriate for addressing the assertion of valuation of liabilities? a. Confirm with creditors b. Test for unrecorded liabilities. c. Perform analytical procedures. d. Verify accounts payable trial balancearrow_forwardWhich of the following audit objectives is to validate the assertion of valuation and allocation? * A. All recorded investments on the statement of financial position exist B. All recorded income from investments has accrued to the entity at the reporting date C. All investments owned by the entity at the reporting date are included on the statement of financial position and all income accruing from investments has been recorded D. Investments are included on the statement of financial position at appropriate amountsarrow_forwardAn auditor's primary substantive procedures for investments typically include evaluating the accounting methods used and testing the valuation. Which of the following assertion(s) is(are) addressed by the audit procedures previously mentioned? * A. II and V B. IV and V C. I, II, V and VI D. II, IV and Varrow_forward
- 12. When auditing' intangible assets, the auditor would likely recomputed amortization and determine whether management's recorded amount is reasonable. When performing this procedure which assertion is the auditor primarily gathering evidence for? a. Completeness b. Existence c. Valuation d. Rights and obligations.arrow_forwardIn the audit of the financial statements, to determine the risks of material misstatement when planning the audit of the tangible fixed assets item, what types of information must the auditor collect? List audit procedures (at least 4 procedures) to collect sufficient and appropriate evidence as a basis for confirmation of tangible fixed assets.arrow_forwardIn evaluating the fair value of net assets in an acquisition the auditor has to gather independent evidence in deciding whether the assessed values are appropriate. Which of the following is not one of the steps the auditor normally would perform in making that assessment? Evaluate the qualifications of the specialist. O Determine their independence from the client. Make the valuations themselves. O Review methodology.arrow_forward
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