Question 1

Examining brokers' advices for a sample of securities purchased during the year is a test for the assertion of

Accepted Answer

A)  completeness. 
B)  disclosure. 
C)  valuation and allocation. 
D)  rights and obligations. 
A)  completeness. 
B)  disclosure. 
C)  valuation and allocation. 
D)  rights and obligations.

Question 2

Level 1 inputs are more risky and difficult to audit than Level 3 inputs to a valuation model.

Accepted Answer

A) True 
 B)False

Question 3

The least crucial element of internal control over cash is

Accepted Answer

A)  separation of cash record-keeping from custody of cash. 
B)  preparation of the monthly bank reconciliation. 
C)  batch processing of checks. 
D)  separation of cash receipts from cash disbursements. 
A)  separation of cash record-keeping from custody of cash. 
B)  preparation of the monthly bank reconciliation. 
C)  batch processing of checks. 
D)  separation of cash receipts from cash disbursements.

Question 4

An imprest cash account is

Accepted Answer

A)  used for investing in marketable securities. 
B)  the principal cash account for an entity. 
C)  one that contains a stipulated amount of money and is used for limited purposes. 
D)  the principal checking account for a branch of an entity. 
A)  used for investing in marketable securities. 
B)  the principal cash account for an entity. 
C)  one that contains a stipulated amount of money and is used for limited purposes. 
D)  the principal checking account for a branch of an entity.

Question 5

When an entity uses a trust company as custodian of its marketable securities,the possibility of concealing fraud most likely would be reduced if the

Accepted Answer

A)  trust company has no direct contact with the entity employees responsible for maintaining investment accounting records. 
B)  securities are registered in the name of the trust company, rather than the entity itself. 
C)  interest and dividend checks are mailed directly to an entity employee who is authorized to sell securities. 
D)  trust company places the securities in a bank safe-deposit vault under the custodian's exclusive control. 
A)  trust company has no direct contact with the entity employees responsible for maintaining investment accounting records. 
B)  securities are registered in the name of the trust company, rather than the entity itself. 
C)  interest and dividend checks are mailed directly to an entity employee who is authorized to sell securities. 
D)  trust company places the securities in a bank safe-deposit vault under the custodian's exclusive control.

Question 6

The auditor should insist that a representative of the entity be present during the physical examination of securities in order to

Accepted Answer

A)  lend authority to the auditor's directives. 
B)  detect forged securities. 
C)  coordinate the return of all securities to proper locations. 
D)  acknowledge the receipt of securities returned. 
A)  lend authority to the auditor's directives. 
B)  detect forged securities. 
C)  coordinate the return of all securities to proper locations. 
D)  acknowledge the receipt of securities returned.

Question 7

You are auditing cash for Moonbeam,Inc.In meeting with the CFO during the planning stages of the audit,she indicated that there was a high risk of misstatement due to fraud in the cash account,given the lack of proper segregation of duties.As the auditor,what tests could you perform to detect fraudulent activities in the cash account?

Accepted Answer

There are three tests used for detecting

Question 8

An entity has a large and active investment portfolio that is kept in a bank safe-deposit box.If the auditor is unable to examine and count the securities at the balance sheet date but will examine and count the securities shortly thereafter,the auditor most likely will

Accepted Answer

A)  request that the bank confirm to the auditor the contents of the safe-deposit box at the balance sheet date. 
B)  examine supporting evidence for transactions occurring during the year. 
C)  count the securities at a subsequent date and confirm with the bank whether securities were added or removed since the balance sheet date. 
D)  request that the entity have the bank seal the safe-deposit box until the auditor can count the securities at a subsequent date. 
A)  request that the bank confirm to the auditor the contents of the safe-deposit box at the balance sheet date. 
B)  examine supporting evidence for transactions occurring during the year. 
C)  count the securities at a subsequent date and confirm with the bank whether securities were added or removed since the balance sheet date. 
D)  request that the entity have the bank seal the safe-deposit box until the auditor can count the securities at a subsequent date.

Examining brokers' advices for a sample of securities purchased during the year is a test for the assertion of

Level 1 inputs are more risky and difficult to audit than Level 3 inputs to a valuation model.

The least crucial element of internal control over cash is

An imprest cash account is

When an entity uses a trust company as custodian of its marketable securities,the possibility of concealing fraud most likely would be reduced if the

The auditor should insist that a representative of the entity be present during the physical examination of securities in order to

An entity has a large and active investment portfolio that is kept in a bank safe-deposit box.If the auditor is unable to examine and count the securities at the balance sheet date but will examine and count the securities shortly thereafter,the auditor most likely will

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Auditing the Inventory Management Process

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

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

Completing the Audit Engagement

Reports on Audited Financial Statements

Professsional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,amd Internal Auditing Services-professional Judgement Module

Filters

Exam 16: Auditing the Financinginvesting Process: Cash and Investments

Examining brokers' advices for a sample of securities purchased during the year is a test for the assertion of

Level 1 inputs are more risky and difficult to audit than Level 3 inputs to a valuation model.

The least crucial element of internal control over cash is

An imprest cash account is

When an entity uses a trust company as custodian of its marketable securities,the possibility of concealing fraud most likely would be reduced if the

The auditor should insist that a representative of the entity be present during the physical examination of securities in order to

An entity has a large and active investment portfolio that is kept in a bank safe-deposit box.If the auditor is unable to examine and count the securities at the balance sheet date but will examine and count the securities shortly thereafter,the auditor most likely will

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Auditing the Inventory Management Process

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

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

Completing the Audit Engagement

Reports on Audited Financial Statements

Professsional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,amd Internal Auditing Services-professional Judgement Module

Filters