Question 1

In a test of controls,auditors may trace receiving reports to vouchers recorded in the voucher register.This is a test for

Accepted Answer

A)  Occurrence. 
B)  Completeness. 
C)  Classification. 
D)  Cutoff. 
A)  Occurrence. 
B)  Completeness. 
C)  Classification. 
D)  Cutoff.

Question 2

Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?

Accepted Answer

A)  Vouchers should be prepared by individuals who are responsible for signing disbursement checks. 
B)  Disbursement vouchers should be approved by at least two responsible management officials. 
C)  The date on a disbursement voucher should be within a few days of the date the voucher is presented for payment. 
D)  The official who signs the check should compare the check with the voucher and should stamp PAID on the voucher documents. 
A)  Vouchers should be prepared by individuals who are responsible for signing disbursement checks. 
B)  Disbursement vouchers should be approved by at least two responsible management officials. 
C)  The date on a disbursement voucher should be within a few days of the date the voucher is presented for payment. 
D)  The official who signs the check should compare the check with the voucher and should stamp PAID on the voucher documents.

Question 3

Small Corporation uses a Wages Clearing Account for its payroll disbursements.At the end of February,a reasonably large debit balance remained in this account.The most likely reason for this is that

Accepted Answer

A)  More labor cost had been assigned to the expense accounts than had been paid. 
B)  Some labor cost had not been properly classified in the expense accounts. 
C)  Some employees had not yet cashed their checks. 
D)  Not enough cash had been transferred to the bank account. 
A)  More labor cost had been assigned to the expense accounts than had been paid. 
B)  Some labor cost had not been properly classified in the expense accounts. 
C)  Some employees had not yet cashed their checks. 
D)  Not enough cash had been transferred to the bank account.

Question 4

An audit team would most likely examine the detail support for which of the following charges?

Accepted Answer

A)  Payroll expense. 
B)  Cost of goods sold. 
C)  Supplies expense. 
D)  Legal expense. 
A)  Payroll expense. 
B)  Cost of goods sold. 
C)  Supplies expense. 
D)  Legal expense.

Question 5

Which of the following would not overstate current-period net income?

Accepted Answer

A)  Capitalizing an expenditure that should be expensed. 
B)  Failing to record a liability for an expenditure. 
C)  Failing to record a check paying an item in vouchers payable. 
D)  All of the above would overstate net income. 
A)  Capitalizing an expenditure that should be expensed. 
B)  Failing to record a liability for an expenditure. 
C)  Failing to record a check paying an item in vouchers payable. 
D)  All of the above would overstate net income.

Question 6

Cutoff tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year most likely would provide assurance about management's assertion of

Accepted Answer

A)  Valuation or allocation. 
B)  Existence or occurrence. 
C)  Completeness. 
D)  Rights and obligations. 
A)  Valuation or allocation. 
B)  Existence or occurrence. 
C)  Completeness. 
D)  Rights and obligations.

Question 7

The typical functions of the personnel and payroll cycle would not include

Accepted Answer

A)  Labor relations. 
B)  Report of attendance and work performed. 
C)  Allocation to cost of goods sold. 
D)  Payroll accounting. 
A)  Labor relations. 
B)  Report of attendance and work performed. 
C)  Allocation to cost of goods sold. 
D)  Payroll accounting.

Question 8

The principal goal of the physical inspection of property,plant,and equipment is to determine actual existence and condition of property.

Accepted Answer

A) True 
 B)False

Question 9

Failure to record a liability generally results in

Accepted Answer

A)  An understatement of profit. 
B)  An understatement of current ratio. 
C)  An overstatement of profit. 
D)  An overstatement of assets. 
A)  An understatement of profit. 
B)  An understatement of current ratio. 
C)  An overstatement of profit. 
D)  An overstatement of assets.

Question 10

___________________________________ and ___________________________________ can cause "unmatched" invoices and related "unmatched" receiving reports to be unnoticed.

Accepted Answer

System fai

Question 11

An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal.The purpose of this substantive audit procedure most likely was to

Accepted Answer

A)  Identify usually large purchases that should be investigated further. 
B)  Verify that cash disbursements were for goods actually received. 
C)  Determine that purchases were properly recorded. 
D)  Test whether payments were for goods actually ordered. 
A)  Identify usually large purchases that should be investigated further. 
B)  Verify that cash disbursements were for goods actually received. 
C)  Determine that purchases were properly recorded. 
D)  Test whether payments were for goods actually ordered.

Question 12

Tracing a sample of time clock cards to payroll registers (journals)is a procedure designed to obtain evidence about the transaction assertion(s)of

Accepted Answer

A)  Occurrence only. 
B)  Occurrence and accuracy only. 
C)  Completeness only. 
D)  Accuracy only. 
A)  Occurrence only. 
B)  Occurrence and accuracy only. 
C)  Completeness only. 
D)  Accuracy only.

Question 13

Specific balance assertions typical of accounts payable would not include

Accepted Answer

A)  Recorded liabilities are obligations of the entity. 
B)  Estimated liabilities are properly valued. 
C)  Accounts payable are not pledged as collateral. 
D)  Payables are recorded in the proper period. 
A)  Recorded liabilities are obligations of the entity. 
B)  Estimated liabilities are properly valued. 
C)  Accounts payable are not pledged as collateral. 
D)  Payables are recorded in the proper period.

Question 14

"All purchase orders are supported by requisitions from proper persons" is a specific example of which management assertion?

Accepted Answer

A)  Occurrence. 
B)  Completeness. 
C)  Cutoff. 
D)  Classification. 
A)  Occurrence. 
B)  Completeness. 
C)  Cutoff. 
D)  Classification.

Question 15

Purchase cutoff procedures should be designed to produce evidence of whether merchandise is included in the inventory of the client company if the company

Accepted Answer

A)  Has paid for the merchandise. 
B)  Has physical possession of the merchandise. 
C)  Holds legal title to the merchandise. 
D)  Holds the shipping documents for the merchandise issued in the company's name. 
A)  Has paid for the merchandise. 
B)  Has physical possession of the merchandise. 
C)  Holds legal title to the merchandise. 
D)  Holds the shipping documents for the merchandise issued in the company's name.

Question 16

If the risk of material misstatement is assessed as very low,it is likely that additional substantive procedures will be required.

Accepted Answer

A) True 
 B)False

Question 17

____________________________________ consist of (1)identification of data population for audit and (2)an expression of the action to be taken to produce relevant audit evidence.

Accepted Answer

The answer of ____________________________________ consist of (1)identification of data population...

Question 18

Purchase orders are "open" from the time they are issued until the goods are received.

Accepted Answer

A) True 
 B)False

Question 19

The usual source for journal entries posted to the general ledger to record the purchase of inventory is

Accepted Answer

A)  Sales invoices updated with cost data from the inventory records department. 
B)  Purchase invoices updated with cost data from the inventory records department. 
C)  Receiving reports updated with cost data from the accounts payable department. 
D)  Vouchers payable journal from the accounts payable department. 
A)  Sales invoices updated with cost data from the inventory records department. 
B)  Purchase invoices updated with cost data from the inventory records department. 
C)  Receiving reports updated with cost data from the accounts payable department. 
D)  Vouchers payable journal from the accounts payable department.

Question 20

Normally,liabilities should be recorded on the date the goods are received and accepted.

Accepted Answer

A) True 
 B)False

In a test of controls,auditors may trace receiving reports to vouchers recorded in the voucher register.This is a test for

Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?

Small Corporation uses a Wages Clearing Account for its payroll disbursements.At the end of February,a reasonably large debit balance remained in this account.The most likely reason for this is that

An audit team would most likely examine the detail support for which of the following charges?

Which of the following would not overstate current-period net income?

Cutoff tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year most likely would provide assurance about management's assertion of

The typical functions of the personnel and payroll cycle would not include

The principal goal of the physical inspection of property,plant,and equipment is to determine actual existence and condition of property.

Failure to record a liability generally results in

_ and _ can cause "unmatched" invoices and related "unmatched" receiving reports to be unnoticed.

An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal.The purpose of this substantive audit procedure most likely was to

Tracing a sample of time clock cards to payroll registers (journals)is a procedure designed to obtain evidence about the transaction assertion(s)of

Specific balance assertions typical of accounts payable would not include

"All purchase orders are supported by requisitions from proper persons" is a specific example of which management assertion?

Purchase cutoff procedures should be designed to produce evidence of whether merchandise is included in the inventory of the client company if the company

If the risk of material misstatement is assessed as very low,it is likely that additional substantive procedures will be required.

____________________________________ consist of (1)identification of data population for audit and (2)an expression of the action to be taken to produce relevant audit evidence.

Purchase orders are "open" from the time they are issued until the goods are received.

The usual source for journal entries posted to the general ledger to record the purchase of inventory is

Normally,liabilities should be recorded on the date the goods are received and accepted.

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

Exam 8: Acquisition and Expenditure Cycle

In a test of controls,auditors may trace receiving reports to vouchers recorded in the voucher register.This is a test for

Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?

Small Corporation uses a Wages Clearing Account for its payroll disbursements.At the end of February,a reasonably large debit balance remained in this account.The most likely reason for this is that

An audit team would most likely examine the detail support for which of the following charges?

Which of the following would not overstate current-period net income?

Cutoff tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year most likely would provide assurance about management's assertion of

The typical functions of the personnel and payroll cycle would not include

The principal goal of the physical inspection of property,plant,and equipment is to determine actual existence and condition of property.

Failure to record a liability generally results in

___________________________________ and ___________________________________ can cause "unmatched" invoices and related "unmatched" receiving reports to be unnoticed.

An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal.The purpose of this substantive audit procedure most likely was to

Tracing a sample of time clock cards to payroll registers (journals)is a procedure designed to obtain evidence about the transaction assertion(s)of

Specific balance assertions typical of accounts payable would not include

"All purchase orders are supported by requisitions from proper persons" is a specific example of which management assertion?

Purchase cutoff procedures should be designed to produce evidence of whether merchandise is included in the inventory of the client company if the company

If the risk of material misstatement is assessed as very low,it is likely that additional substantive procedures will be required.

____________________________________ consist of (1)identification of data population for audit and (2)an expression of the action to be taken to produce relevant audit evidence.

Purchase orders are "open" from the time they are issued until the goods are received.

The usual source for journal entries posted to the general ledger to record the purchase of inventory is

Normally,liabilities should be recorded on the date the goods are received and accepted.

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

_ and _ can cause "unmatched" invoices and related "unmatched" receiving reports to be unnoticed.