Question 1

An indenture is the written agreement between the bond issuer and the bondholder.

Accepted Answer

A) True 
 B)False

Question 2

When the client holds a large amount of negotiable securities,auditors need to plan to guard against

Accepted Answer

A) unauthorized negotiation of the securities before they are counted. 
B) unrecorded sales of securities after they are counted. 
C) substitution of securities already counted for other securities that should be on hand but are not. 
D) substitution of authentic securities with counterfeit securities. 
A) unauthorized negotiation of the securities before they are counted. 
B) unrecorded sales of securities after they are counted. 
C) substitution of securities already counted for other securities that should be on hand but are not. 
D) substitution of authentic securities with counterfeit securities.

Question 3

Capital stock may be subject to _____________________________ when independent registrars and transfer agents are employed.
Question also found in study guide

Accepted Answer

The answer of Capital stock may be subject to _____________________________...

Question 4

An audit team testing long-term investments would ordinarily use analytical procedures to ascertain the reasonableness of the

Accepted Answer

A) existence of unrealized gains or losses. 
B) completeness of recorded investment income. 
C) classification as available-for-sale or trading securities. 
D) valuation of trading securities. 
A) existence of unrealized gains or losses. 
B) completeness of recorded investment income. 
C) classification as available-for-sale or trading securities. 
D) valuation of trading securities.

Question 5

Auditors' test of controls over the production of estimate amounts is limited to a comparison of past estimates compared to actual amounts.

Accepted Answer

A) True 
 B)False

Question 6

...

Accepted Answer

The answer of ......

Question 7

Which of the following audit procedures would not likely be performed for audits of investments?

Accepted Answer

A) Read board of directors' minutes for authorization of investment strategies. 
B) Confirm investments with registrar. 
C) Confirm investments with broker or trustee. 
D) Compare valuation to published market prices. 
A) Read board of directors' minutes for authorization of investment strategies. 
B) Confirm investments with registrar. 
C) Confirm investments with broker or trustee. 
D) Compare valuation to published market prices.

Question 8

XYZ Company has investment securities held by a broker.An auditor is reviewing the last broker's statement for the year.For each of the tests 1-5,select the ASB balance assertions listed in A-D that the auditor is testing.  . Verified the name on the account was the company's  name.                    A. Rights and obligations
_____ 2. Vouched items listed on the statement to the                                           B. Completeness investment account.
______3. Vouched purchases listed on the statement authorization by senior management or the board of directors. to                                         C. Valuation or Accuracy 
______4. The auditor has received a letter of  directly from the broker for investments listed on the statement.confirmation                               D. Existence
______5. The auditor compared the price of the securities listed on the broker's statement with the price listed on that day in The Wall Street Journal to the price used to record the investment on the balance sheet.

Accepted Answer

1.A; 2.B;

Question 9

In the audit of notes payable,an auditor testing the ASB balance assertion of accuracy and valuation most likely would

Accepted Answer

A) read directors' and finance committee's minutes for authorization of financing transactions. 
B) select a sample of paid notes and trace interest expense to the general ledger account. 
C) select a sample of paid notes and recalculate interest expense for the period under audit. 
D) select a sample of notes payable and vouch cash receipt to the bank statement. 
A) read directors' and finance committee's minutes for authorization of financing transactions. 
B) select a sample of paid notes and trace interest expense to the general ledger account. 
C) select a sample of paid notes and recalculate interest expense for the period under audit. 
D) select a sample of notes payable and vouch cash receipt to the bank statement.

Question 10

Which of the following would not be a place in which owners' equity transactions would be documented?

Accepted Answer

A) Capital budget. 
B) Minutes of the meetings of the board of directors. 
C) Proxy statements. 
D) Securities offering registration statements. 
A) Capital budget. 
B) Minutes of the meetings of the board of directors. 
C) Proxy statements. 
D) Securities offering registration statements.

Question 11

Auditors count investment securities held by the client primarily to test the ASB balance assertion of

Accepted Answer

A) existence. 
B) rights and obligations. 
C) completeness. 
D) valuation. 
A) existence. 
B) rights and obligations. 
C) completeness. 
D) valuation.

Question 12

The document that indicates what property plant and equipment the company wants to purchase in a given year is the cash flow forecast.

Accepted Answer

A) True 
 B)False

Question 13

The ASB balance assertion of _____________________________ is paramount in the verification of long-term liabilities and determination that all liabilities are recorded.
Question also found in study guide

Accepted Answer

The answer of The ASB balance assertion of _____________________________ is...

Question 14

ABC Company has issued a bond that pays 5% interest semiannually to bond holders on record June 30 and December 30.Payments are made on July 15 and January 15.ABC Company has a December 31 fiscal year-end.The auditor vouches the January 15,2018 payment to the liabilities recorded on the December 31,2017 balance sheet.Which of the following ASB balance assertions is the auditor testing?

Accepted Answer

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

Question 15

Which of the following is not an off-balance-sheet item?

Accepted Answer

A) Purchase commitment. 
B) Capitalized lease. 
C) Loan commitment. 
D) Synthetic lease. 
A) Purchase commitment. 
B) Capitalized lease. 
C) Loan commitment. 
D) Synthetic lease.

Question 16

A ___________________________ approved by the board of directors constitutes the authorization for capital asset acquisitions and investments.
Question also found in study guide

Accepted Answer

The answer of A ___________________________ approved by the board of...

Question 17

Records of interest rates and bonds payable are maintained by the _____________________________ and the ____________________________.
Question also found in study guide

Accepted Answer

accounting

Question 18

Related party transactions

Accepted Answer

A) must be valued as if they were arm's length. 
B) must be assumed to be valued differently than if they were arm's length. 
C) must be disclosed in the financial statements. 
D) must be disclosed in the financial statements and the auditor's report. 
A) must be valued as if they were arm's length. 
B) must be assumed to be valued differently than if they were arm's length. 
C) must be disclosed in the financial statements. 
D) must be disclosed in the financial statements and the auditor's report.

Question 19

The preferred method of determining fair value of transactions is

Accepted Answer

A) market-based values. 
B) basing them on reasonable management assumptions. 
C) external auditor estimates. 
D) detailed computations by outside experts. 
A) market-based values. 
B) basing them on reasonable management assumptions. 
C) external auditor estimates. 
D) detailed computations by outside experts.

Question 20

A _________________________ handles the exchange of shares,canceling the shares surrendered by sellers and issuing new certificates to buyers.
Question also found in study guide

Accepted Answer

The answer of A _________________________ handles the exchange of shares,canceling...

An indenture is the written agreement between the bond issuer and the bondholder.

When the client holds a large amount of negotiable securities,auditors need to plan to guard against

Capital stock may be subject to _____________________________ when independent registrars and transfer agents are employed. Question also found in study guide

An audit team testing long-term investments would ordinarily use analytical procedures to ascertain the reasonableness of the

Auditors' test of controls over the production of estimate amounts is limited to a comparison of past estimates compared to actual amounts.

...

Which of the following audit procedures would not likely be performed for audits of investments?

In the audit of notes payable,an auditor testing the ASB balance assertion of accuracy and valuation most likely would

Which of the following would not be a place in which owners' equity transactions would be documented?

Auditors count investment securities held by the client primarily to test the ASB balance assertion of

The document that indicates what property plant and equipment the company wants to purchase in a given year is the cash flow forecast.

The ASB balance assertion of _____________________________ is paramount in the verification of long-term liabilities and determination that all liabilities are recorded. Question also found in study guide

Which of the following is not an off-balance-sheet item?

A ___________________________ approved by the board of directors constitutes the authorization for capital asset acquisitions and investments. Question also found in study guide

Records of interest rates and bonds payable are maintained by the _ and the . Question also found in study guide

Related party transactions

The preferred method of determining fair value of transactions is

A _________________________ handles the exchange of shares,canceling the shares surrendered by sellers and issuing new certificates to buyers. Question also found in study guide

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

Acquisition and Expenditure Cycle

Production Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 10: Finance and Investment Cycle

An indenture is the written agreement between the bond issuer and the bondholder.

When the client holds a large amount of negotiable securities,auditors need to plan to guard against

Capital stock may be subject to _____________________________ when independent registrars and transfer agents are employed. Question also found in study guide

An audit team testing long-term investments would ordinarily use analytical procedures to ascertain the reasonableness of the

Auditors' test of controls over the production of estimate amounts is limited to a comparison of past estimates compared to actual amounts.

...

Which of the following audit procedures would not likely be performed for audits of investments?

In the audit of notes payable,an auditor testing the ASB balance assertion of accuracy and valuation most likely would

Which of the following would not be a place in which owners' equity transactions would be documented?

Auditors count investment securities held by the client primarily to test the ASB balance assertion of

The document that indicates what property plant and equipment the company wants to purchase in a given year is the cash flow forecast.

The ASB balance assertion of _____________________________ is paramount in the verification of long-term liabilities and determination that all liabilities are recorded. Question also found in study guide

Which of the following is not an off-balance-sheet item?

A ___________________________ approved by the board of directors constitutes the authorization for capital asset acquisitions and investments. Question also found in study guide

Records of interest rates and bonds payable are maintained by the _____________________________ and the ____________________________. Question also found in study guide

Related party transactions

The preferred method of determining fair value of transactions is

A _________________________ handles the exchange of shares,canceling the shares surrendered by sellers and issuing new certificates to buyers. Question also found in study guide

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

Acquisition and Expenditure Cycle

Production Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Records of interest rates and bonds payable are maintained by the _ and the . Question also found in study guide