Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 25, Problem 21.2MCQ
To determine
Identify the procedure that is most likely to be performed during an engagement to compile the financial statements of a non-issuer.
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Which of the following best describes the role of analytical procedures near the end of theaudit engagement?a. To identify possible deficiencies in the client’s internal control over financial reporting.b. To identify accounts that appear to be misstated with the intention of planning thenature, timing, and extent of other substantive procedures.c. To gather evidence to support one or more assertion(s) related to the account balance orclass of transactions.d. To provide an overall review of the financial information and assessment of the adequacy of evidence gathered during the audit engagement.
Which of the following procedures would a CPA most likely perform in planning a financial statement audit?a. Make inquiries of the client’s lawyer concerning pending litigation.b. Perform cutoff tests of cash receipts and disbursements.c. Compare financial information with nonfinancial operating data.d. Recalculate the prior-years’ accruals and deferrals.
Which of the following is an example of "other information" that could be used by an auditor as evidential matter supporting the financial statements?
Worksheets supporting cost allocations.
Accounting manuals.
Special journals.
Confirmation of accounts receivable.
Chapter 25 Solutions
Auditing And Assurance Services
Ch. 25 - Prob. 1RQCh. 25 - Prob. 2RQCh. 25 - Prob. 3RQCh. 25 - Prob. 4RQCh. 25 - Prob. 5RQCh. 25 - Prob. 6RQCh. 25 - Prob. 7RQCh. 25 - Prob. 8RQCh. 25 - Prob. 9RQCh. 25 - Prob. 10RQ
Ch. 25 - You have been asked to provide assurance on...Ch. 25 - Prob. 12RQCh. 25 - Prob. 13RQCh. 25 - Prob. 14RQCh. 25 - Prob. 15RQCh. 25 - Explain what is meant by prospective financial...Ch. 25 - Prob. 17RQCh. 25 - Prob. 18.1MCQCh. 25 - Prob. 18.2MCQCh. 25 - Prob. 18.3MCQCh. 25 - Prob. 19.1MCQCh. 25 - Prob. 19.2MCQCh. 25 - Prob. 20.1MCQCh. 25 - Prob. 20.2MCQCh. 25 - Prob. 21.1MCQCh. 25 - Prob. 21.2MCQCh. 25 - Prob. 21.3MCQCh. 25 - You are doing a review services and related tax...Ch. 25 - Prob. 23DQPCh. 25 - Prob. 24DQPCh. 25 - Prob. 25DQPCh. 25 - Prob. 27DQPCh. 25 - Prob. 28DQPCh. 25 - Prob. 29DQPCh. 25 - Prob. 30DQP
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- Professional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.arrow_forwardWhen preparing the financial statements, management makes their best judgment on the account balances contained therein management relies on the auditor to determine the account balances management makes assertions about each account and related disclosures in the notes management shops around auditors to ensure they will receive the opinion they wantarrow_forwardWhich of the following can be used as a fundamental source of information in an audit? a. Money in the safe b. Oral testimony of the person responsible for accounting c. An e-mail from a supplier d. None e. Income statementarrow_forward
- 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.arrow_forwardChoose the one correct answer The following are useful source of evidence with regard the reasonableness of the client’s accounting estimation policy regarding the collectability of accounts receivables, except: *A. Reviewing events happening after the balance sheet date but before the issuance of financial statements.B. Sending confirmation letters to customers to determine the customer’s ability to settle their accounts.C. Assessing the client’s historical experience in writing off uncollectible accounts in the prior years.D. Determining the consistency of the client’s policy with the industry practice.E. None of the abovearrow_forwardWhich of the following types of documentary evidence should the auditor consider the most reliable?a. Sales invoice created by the client with the support of proof of delivery from an outside delivery serviceb. Confirmation of debt balances sent and returned directly to the auditorc. Check made by the company and includes a sign of approval of the party receiving the money, which is included in the bank statement sent directly to the auditord. An audit list prepared by the client controller and reviewed by the client treasurer.arrow_forward
- The 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_forwardWhich of the following communications is most likely to be written before the balance-sheetdate?a. A report to the audit committee on the results of testing of internal control over cash receipts.b. Confirmation letters to vendors confirming the amounts they owe to the client.c. An attorney’s letter regarding contingent liabilities.d. An engagement letter.arrow_forwardWhen auditing the accounts receivable account on the balance sheet, an auditor’s procedures most likely would focus primarily on management’s assertion ofa. Existence.b. Completeness.c. Presentation and disclosure.d. Rights and obligations.arrow_forward
- Define the following terms below: A. Forensic Accounting B. Financial Accounting C. Auditing D. Fraud Examination E. Fraud Examiner F. Professional standards, legislation and regulatory requirements NB: Answer questions A-Farrow_forwardAuditors 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_forward2. 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 balancearrow_forward
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