Question 1

Tracing the payables to the cash disbursements journal can provide the evidence regarding the valuation of accounts payable.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following departments most likely would approve changes in pay rates and deductions from employee salaries?

Accepted Answer

A) Personnel. 
B) Treasurer. 
C) Controller. 
D) Payroll. 
A) Personnel. 
B) Treasurer. 
C) Controller. 
D) Payroll.

Question 3

Effective control over the cash payroll function would mandate which of the following?

Accepted Answer

A) The payroll clerk should fill the envelopes with cash and include a computation of the net wages. 
B) The paymaster should be retain unclaimed payroll envelopes. 
C) Each employee should be asked to sign a receipt for wages received. 
D) A separate checking account for payroll should be maintained. 
A) The payroll clerk should fill the envelopes with cash and include a computation of the net wages. 
B) The paymaster should be retain unclaimed payroll envelopes. 
C) Each employee should be asked to sign a receipt for wages received. 
D) A separate checking account for payroll should be maintained.

Question 4

A voucher would typically contain

Accepted Answer

A) A purchase requisition,purchase order,vendor invoice,receiving report,and check copy. 
B) A purchase requisition,purchase order,sales invoice,receiving report,and check copy. 
C) A purchase requisition,sales order,sales invoice,receiving report,and check copy. 
D) A purchase requisition,sales order,vendor invoice,receiving report,and check copy. 
A) A purchase requisition,purchase order,vendor invoice,receiving report,and check copy. 
B) A purchase requisition,purchase order,sales invoice,receiving report,and check copy. 
C) A purchase requisition,sales order,sales invoice,receiving report,and check copy. 
D) A purchase requisition,sales order,vendor invoice,receiving report,and check copy.

Question 5

The auditor traces items from the receiving reports to the accounts payable journal in order to satisfy the

Accepted Answer

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

Question 6

The permanent reference files (master files)in a personnel and payroll database ordinarily do not include which of the following?

Accepted Answer

A) Deduction table. 
B) Payroll master. 
C) Compensation table. 
D) Employee earning record. 
A) Deduction table. 
B) Payroll master. 
C) Compensation table. 
D) Employee earning record.

Question 7

Which of the following is the best audit procedure for determining the existence of unrecorded liabilities?

Accepted Answer

A) Examine confirmation requests returned by creditors whose accounts are on a subsidiary trial balance of accounts payable. 
B) Examine a sample of cash disbursements in the period subsequent to year-end. 
C) Examine a sample of invoices a few days prior to and subsequent to year-end to ascertain whether they have been properly recorded. 
D) Examine unusual relationships between monthly accounts payable and recorded purchases. 
A) Examine confirmation requests returned by creditors whose accounts are on a subsidiary trial balance of accounts payable. 
B) Examine a sample of cash disbursements in the period subsequent to year-end. 
C) Examine a sample of invoices a few days prior to and subsequent to year-end to ascertain whether they have been properly recorded. 
D) Examine unusual relationships between monthly accounts payable and recorded purchases.

Question 8

F.Jack,CPA,is the auditor of Jill Corporation.Jack plans to follow last year's work papers in selecting accounts payable to be confirmed.Confirmations were mailed to 50 of Jill's 200 suppliers.The sample was designed to select accounts with the largest balances.Jack and Jill spent a lot of time reconciling minor differences between the confirmation amounts and the accounts payable trial balance.
Required:
Do you believe Jack should use the same sample design for accounts payable confirmations this year? If not,what suggestions can you give to improve the design?

Accepted Answer

Because of the concern for understatemen

Question 9

Explain why auditors must put more emphasis on the completeness and obligation assertion when auditing payables and contrast this with the audit of asset accounts.

Accepted Answer

The emphasis on completeness is rightly

Question 10

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 11

Cash disbursements are authorized by

Accepted Answer

A) Purchase orders. 
B) Invoices. 
C) Receiving reports. 
D) A complete voucher package. 
A) Purchase orders. 
B) Invoices. 
C) Receiving reports. 
D) A complete voucher package.

Question 12

When verifying debits to the perpetual inventory records of a nonmanufacturing company,auditors would be most interested in examining a sample of purchase

Accepted Answer

A) Approvals. 
B) Requisitions. 
C) Invoices. 
D) Orders. 
A) Approvals. 
B) Requisitions. 
C) Invoices. 
D) Orders.

Question 13

Which of the following fraud detection steps could not be performed by CAATs?

Accepted Answer

A) Look for photocopies in invoice files. 
B) Look for vendor invoices in numerical order. 
C) Look for vendor invoices slightly below the approval threshold. 
D) Look for duplicate vendor numbers. 
A) Look for photocopies in invoice files. 
B) Look for vendor invoices in numerical order. 
C) Look for vendor invoices slightly below the approval threshold. 
D) Look for duplicate vendor numbers.

Question 14

Proper separation of duties involves the purchasing department as the recordkeeping function

Accepted Answer

A) True 
 B)False

Question 15

...

Accepted Answer

The answer of ......

Question 16

The payroll department approves payroll hours prior to processing the payroll.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not a major control risk in the payroll cycle?

Accepted Answer

A) Paying fictitious "employees." 
B) Overpaying for time or production. 
C) Losing employees to competitors. 
D) Incorrect accounting for costs or expenses. 
A) Paying fictitious "employees." 
B) Overpaying for time or production. 
C) Losing employees to competitors. 
D) Incorrect accounting for costs or expenses.

Question 18

The accounts payable department reconciles the vendor invoice,purchase order,and receiving report prior to approving the payment to the vendor.

Accepted Answer

A) True 
 B)False

Question 19

The auditor decided to test accounts payable by sending open-ended (blank)confirmations to selected vendors.The auditor's best approach in selecting the vendor accounts to confirm is to

Accepted Answer

A) Select vendor accounts with large balances. 
B) Select vendor accounts at random in order to apply a statistical sampling procedure. 
C) Select vendor accounts based on the number of purchases from vendors during the year. 
D) Select vendor accounts that are past due. 
A) Select vendor accounts with large balances. 
B) Select vendor accounts at random in order to apply a statistical sampling procedure. 
C) Select vendor accounts based on the number of purchases from vendors during the year. 
D) Select vendor accounts that are past due.

Question 20

Computer controls that might be found in an advanced on-line acquisition and expenditure system would not include

Accepted Answer

A) All vendor invoices are prenumbered and the numbers accounted for. 
B) Each terminal performs only designated functions. 
C) An identification number and password are required to enter the nonautomatic purchase orders. 
D) The check signature is printed using a signature plate that is installed on the computer printer only when checks are printed. 
A) All vendor invoices are prenumbered and the numbers accounted for. 
B) Each terminal performs only designated functions. 
C) An identification number and password are required to enter the nonautomatic purchase orders. 
D) The check signature is printed using a signature plate that is installed on the computer printer only when checks are printed.

Tracing the payables to the cash disbursements journal can provide the evidence regarding the valuation of accounts payable.

Which of the following departments most likely would approve changes in pay rates and deductions from employee salaries?

Effective control over the cash payroll function would mandate which of the following?

A voucher would typically contain

The auditor traces items from the receiving reports to the accounts payable journal in order to satisfy the

The permanent reference files (master files)in a personnel and payroll database ordinarily do not include which of the following?

Which of the following is the best audit procedure for determining the existence of unrecorded liabilities?

Explain why auditors must put more emphasis on the completeness and obligation assertion when auditing payables and contrast this with the audit of asset accounts.

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

Cash disbursements are authorized by

When verifying debits to the perpetual inventory records of a nonmanufacturing company,auditors would be most interested in examining a sample of purchase

Which of the following fraud detection steps could not be performed by CAATs?

Proper separation of duties involves the purchasing department as the recordkeeping function

...

The payroll department approves payroll hours prior to processing the payroll.

Which of the following is not a major control risk in the payroll cycle?

The accounts payable department reconciles the vendor invoice,purchase order,and receiving report prior to approving the payment to the vendor.

The auditor decided to test accounts payable by sending open-ended (blank)confirmations to selected vendors.The auditor's best approach in selecting the vendor accounts to confirm is to

Computer controls that might be found in an advanced on-line acquisition and expenditure system would not include

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 Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 8: Acquisition and Expenditure Cycle

Tracing the payables to the cash disbursements journal can provide the evidence regarding the valuation of accounts payable.

Which of the following departments most likely would approve changes in pay rates and deductions from employee salaries?

Effective control over the cash payroll function would mandate which of the following?

A voucher would typically contain

The auditor traces items from the receiving reports to the accounts payable journal in order to satisfy the

The permanent reference files (master files)in a personnel and payroll database ordinarily do not include which of the following?

Which of the following is the best audit procedure for determining the existence of unrecorded liabilities?

Explain why auditors must put more emphasis on the completeness and obligation assertion when auditing payables and contrast this with the audit of asset accounts.

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

Cash disbursements are authorized by

When verifying debits to the perpetual inventory records of a nonmanufacturing company,auditors would be most interested in examining a sample of purchase

Which of the following fraud detection steps could not be performed by CAATs?

Proper separation of duties involves the purchasing department as the recordkeeping function

...

The payroll department approves payroll hours prior to processing the payroll.

Which of the following is not a major control risk in the payroll cycle?

The accounts payable department reconciles the vendor invoice,purchase order,and receiving report prior to approving the payment to the vendor.

The auditor decided to test accounts payable by sending open-ended (blank)confirmations to selected vendors.The auditor's best approach in selecting the vendor accounts to confirm is to

Computer controls that might be found in an advanced on-line acquisition and expenditure system would not include

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 Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters