Exam 15: Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders' Equity, and Income Statement Accounts

An auditor usually obtains evidence of stockholders' equity transactions by reviewing the entity's:

All corporate capital stock transactions should ultimately be traced to the:

You have been assigned the duty of auditing long-term debt and retained earnings for Keys, Inc. Describe the tests you would use to support management's assertions regarding presentation for these accounts.

The auditor's program for the examination of long-term debt should include steps that require the:

Two months before year-end, the bookkeeper erroneously recorded the receipt of a long-term bank loan by a debit to cash and a credit to sales. Which of the following is the most effective procedure for detecting this type of error?

The auditor typically begins an audit of retained earnings by obtaining a schedule of account activity for the period.

The registrar is responsible for preparing stock certificates and maintaining adequate stockholders' records.

Before expressing an opinion concerning the results of operations, the auditor would most likely proceed with the examination of the income statement by:

When auditing capital-stock accounts, the cutoff assertion is the most important to consider.

Long-term borrowing should be properly authorized.

The auditor can best verify an entity's bond sinking fund transactions and year-end balance by:

Valuation and allocation is most likely an issue for long-term debt if:

Income statement accounts must be accounted for in accordance with GAAP.

Three types of transactions usually occur in stockholders' equity: issuance of stock, repurchase of stock, and payment of dividends.

Identify the four major assertions made regarding stockholders' equity and describe one control activity for each.

During its fiscal year, a company issued, at a discount, a substantial amount of bonds. When performing audit work in connection with the bond issue, the independent auditor should:

Which audit procedure is most closely related to management's assertion regarding presentation of liabilities?

Examining cancelled stock certificates addresses the assertion of:

Match the balance sheet account with the income statement account that is typically audited at the same time. -Property, Plant, and Equipment

A control which ensures that long-term borrowing is properly initiated by appropriate individuals addresses the control assertion of: