Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 34DQP
To determine
Identify the specific audit objective that each of the following specific
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Which of the following audit procedures is aimed most directly at testing the completeness assertion for accounts payable?
Footing the list of accounts payable.
Tracing shipping reports after year-end to related customer purchase orders and invoices.
Examining underlying documentation for cash disbursements in the period after year-end.
Tracing shipping reports issued on or before year-end to related customer purchase orders and invoices.
Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities? *A. Scan the cash disbursements entries recorded just before year end for indications of unusual transactions.B. Compare a sample of purchase orders issued just after year end with the year-end accounts payable trial balance.C. Obtain a copy of the receiving report until year end and its related sales invoice and trace them to the purchases journal.D. Compare the entries recorded in the purchases journal and the cash disbursements journal just before year end.
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.
Chapter 6 Solutions
Auditing And Assurance Services
Ch. 6 - Prob. 1RQCh. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - Prob. 4RQCh. 6 - Prob. 5RQCh. 6 - Prob. 6RQCh. 6 - Prob. 7RQCh. 6 - What are the six elements of professional...Ch. 6 - What are the five elements of an effective...Ch. 6 - Describe two of the more common judgment traps and...
Ch. 6 - Identify the cycle to which each of the following...Ch. 6 - Why are sales, sales returns and allowances, bad...Ch. 6 - Prob. 13RQCh. 6 - Prob. 14RQCh. 6 - Prob. 15RQCh. 6 - Prob. 16RQCh. 6 - Prob. 17RQCh. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - Prob. 20RQCh. 6 - Prob. 21.1MCQCh. 6 - Prob. 21.2MCQCh. 6 - Prob. 21.3MCQCh. 6 - Prob. 22.1MCQCh. 6 - Prob. 22.2MCQCh. 6 - Prob. 22.3MCQCh. 6 - Prob. 23.1MCQCh. 6 - Prob. 23.2MCQCh. 6 - Prob. 23.3MCQCh. 6 - Prob. 24.1MCQCh. 6 - Prob. 24.2MCQCh. 6 - Prob. 24.3MCQCh. 6 - Prob. 25DQPCh. 6 - Prob. 26DQPCh. 6 - Prob. 27DQPCh. 6 - Prob. 28DQPCh. 6 - Prob. 29DQPCh. 6 - Prob. 30DQPCh. 6 - Prob. 31DQPCh. 6 - Prob. 32DQPCh. 6 - Prob. 33DQPCh. 6 - Prob. 34DQP
Knowledge Booster
Similar questions
- Indicate whether each of the following audit procedures is a testof controls, a substantive test, or a dual-purpose test. Next, indicate the financial statement assertion most closely related to each audit procedure. Required:a. Vouch recorded sales invoices to supporting shipping documents.b. Inspect recorded sales invoices for credit approval.c. Vouch recorded sales invoices prices to the approved price list.d. Send confirmations to all customers regarding accounts receivable.e. Recalculate the arithmetic accuracy of the recorded sales invoices.f. Compare the shipment date of recorded sales invoices with the invoice record date.g. Trace recorded sales invoices to posting in the general ledger control account and in the correct customer’s account.h. Select a sample of shipping documents from the shipping department file and trace shipments to recorded sales invoices.i. Scan recorded sales invoices and shipping documents for missing numbers in sequence.j. Vouch sales invoices and…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_forwardFor each of the accounts balances and associated assertions below, select the audit procedure from the list provided that gives the most appropriate audit evidence for the account assertion. Accounts Balance Assertion Procedure Inventory Completeness a. Examine invoices from suppliers. b. Examine invoices paid after year-end and trace to subsidiary ledger. c. Select items located in the inventory warehouse and trace to the inventory listing. d. Trace sales invoices and shipping documents just after year-end to customer accounts. Cash Rights and obligations a. Agree bank statement to the subsidiary ledger. b. Agree the cash balance per the bank reconciliation to the year-end bank statement. c. Review the bank confirmation for information on compensating balances. d. Trace deposits per the bank statement to the cash subsidiary ledger. Accounts Receivable Existence a. Review confirmation of accounts receivable…arrow_forward
- asap F Identify the primary audit objectives that auditors hope to accomplish by confirming a client's year-end accounts receivable. Explain the difference between "positive" and "negative" confirmation requests and discuss the quality of audit evidence yielded by each.arrow_forwardThe auditors have determined that each of the following objectives will be a part of the audit of SSC Corporation. While several procedures will ordinarily address an audit objective, select the procedure most directly related to the audit objective. Each procedure may be used once, more than once, or not at all. 1. All receivables that should be recorded are recorded as of year-end. 2. Recorded receivables are at appropriate net realizable values. 3. Recorded receivables exist. 4. The client has rights to recorded year-end receivables. 5. The presentation and disclosure of receivables are adequate. Trace a sample of sales invoiced from late in December to the sales journal and to postings in accounts receivable and sales amounts. Review the aged trial balance for significant past due accounts. Review board of director minutes and underlying contracts and sales terms with customers. Vouch year-end accounts…arrow_forwardMatch each example audit procedure with its correct general audit objective related to accounts receivable. Select a sample of sales invoices in the subsequent period, and examine the related shipping documents for date of shipment to ascertain whether some of those shipments at the end of the period were inadvertently not recorded Provide a list of related parties to all members of the audit team to assist in identification of the transacations Existence of assets Rights to assets Review confirmations of liabilities to determine if receivables have been sold Completeness of assets Compare the amount of credits given to customers in the subsequent period to the amount estimated by management Cutoff of transactions Confirm a sample of receivables by direct communication with the debtors Valuation of assets Vouch sales and cash receipt transactions occurring near period end Financial statement presentation and disclosure ofarrow_forward
- Which of the following audit procedures is a dual-purpose test, which tests the effectiveness of internal controls as well as any material misstatements in the financial statements? A. The auditor accounts for the sequence of sales invoices. B. The auditor selects a sample of transactions in the sales journal and traces them to the relevant shipping documents. C. The auditor adds the transactions in the purchase journal and agrees to the total amount recorded in the general ledger. D. A test over the bank reconciliation. E. The auditor obtains a sample of timesheets for casual employees and checks for evidence of approval.arrow_forward1. For each of the following audit procedures, identify A- the type of audit evidence and B- the related audit objective. a. Ask the accounts payable clerk about procedures for verifying prices, quantities, and extensions on vendors’ invoices – b. Vouch entries in sales journal to sales invoices and related shipping documents. – c. Examine the footnotes about the company’s policies for recording revenue transactions to determine whether the disclosures are reasonable d. Examine expense voucher packages and related vendors’ invoices for approval of expense account classification. e. Add the sales journal for the month of July and trace amounts to the general ledger f. Compare the quantities on hand and unit prices on this year’s inventory count sheets with those in the preceding year as a test for large differences. g. Test the extension of unit prices times quantity on the inventory list for a sample of items, test foot the list, and compare the total to the general ledger. h. Trace…arrow_forwardWhich of the following would provide an auditor with the most reliable evidence reguarding the existence of accounts receivable? A. A copy of the invoice sent to the customer. B. Acopy of the customer's sales order held by the client. C. An accounts receivable confirmation received by the auditor from the client's customer. D. An aging schedule showing the composition of the year-end-accounts receivable balance.arrow_forward
- The following are commonly performed tests of controls and substantive tests of transactions audit procedures in the sales and collection cycle, acquisition and payment cycle, and inventory and warehousing cycle: Account for a sequence of shipping documents and examine each one to make sure that a duplicate sales invoice is attached. Compare the quantity and description of items on shipping documents with the related duplicate sales invoices. Trace a sample of voucher packages to the acquisitions journal throughout the year to determine that the transaction is included in the acquisitions journal. Determine if the transaction was recorded in the correct month, based on when the goods were received and the terms of the transaction. Required: Identify for each test the related cycle. Identify whether each audit procedure is a test of control or a substantive test of transactions. State which of the six transaction-related audit objectives each of the audit procedures fulfills.arrow_forwardWhich of the following audit procedures would an auditor most likely perform to test controls relating to management'ss assertion concerning the completeness of sales transactions? A. Verify the extensions and footings on the entity's sales invoice and monthly customer statements have been recomputed. B. Inspect the entity's reports of prenumbered shipping documents that have not been recorded in the sales journal. C. Compare the invoiced prices on the prenumbered sales invoices to the entity's authorized price list. D. inquire about the entity's credit granting policies and the consistent application of credit checks.arrow_forwardThe following are commonly performed tests of controls and substantive tests of transactions audit procedures in the sales and collection cycle: Review the prelisting of cash receipts to determine whether cash is prelisted daily. Reconcile the recorded cash receipts on the prelisting with the cash receipts journal and the bank statement for a one-month period. Account for a sequence of shipping documents and examine each one to make sure that a related sales invoice exists. Account for a sequence of sales invoices and examine each one to make sure that a related shipping document exists. Compare the quantity and description of items on shipping documents with the related sales invoices. Trace recorded sales in the sales journal to the related accounts receivable master file and compare the customer name, date, and amount for each one. Examine sales returns for approval by an authorized official. Required Identify whether each audit procedure is a test of control or a…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub