Order ID | 53563633773 |
Type | Essay |
Writer Level | Masters |
Style | APA |
Sources/References | 4 |
Perfect Number of Pages to Order | 5-10 Pages |
Communications Among Audit Team Members Essay
Write a 500 word, five-paragraph comparison-contrast essay on one of the assigned topics. Follow all the rules of MLA essays and make sure your essay is organized and developed properly.
Topics (choose one):
Contrast yourself with a sibling. Do NOT state the obvious (we are both girls, we have the same parents, we both have brown eyes, etc.). Focus on what makes you different despite the fact that you were raised similiarly.
Contrast two family members of the same “position” (two grandmothers, two aunts, two uncles, two cousins, etc.)
Contrast two coaches, teachers, classes
Compare two jobs you have held
Compare two relationships (friendships, people you have dated, mentorship, etc.)
Contrast two places you have lived (the physical places, area of the world, rural vs. urban, with roommates vs. by yourself) Make sure to use MLA format (see sample on pages 488-496 of the Little, Brown Handbook). Unlike the sample, your essay should NOT contain research, but should have plenty of support from your life experiences. Make sure the heading and page numbering are correct as well as the indentations and spacing.
Home>Business & Finance homework help>Accounting homework help>Due in 4 hours, experts needed.
1
ACCT 422 – Auditing Theory and Practice
Exam #2
Due: 4 hours after the Private Message containing the Exam is opened
and no later than Sunday, February 23, 2014 at 11:00 p.m. EST
Instructions: You have four (4) hours to complete and submit this Exam in your assignment
folder. This is an open book, open notes Exam, however you should work independently. This
Exam consists of 4 parts and 65 questions. Your answers to the Exam should be submitted on a
separate answer sheet. Your answer sheet should be submitted as an attachment in your
assignment folder under the “Exam 2” folder in Microsoft Word, WordPerfect or PDF format.
Please write your name on your answer sheet. Please do not write your answers directly in
the narrative portion of your assignment folder.
Part 1: (worth total of 64 points)
For Part 1, please number your answer sheet from 1 to 40 and provide the letter corresponding to
the best answer (eg, 1. A, 2. B, etc.).
1.
Which of the following is not a likely source of information to assess fraud
risks?
Communications among audit team members
Inquiries of management
Analytical procedures
Consideration of fraud risks discovered during recent audits of other clients
2.
Which of the following audit tests is usually the least costly to perform?
Analytical procedures
Tests of controls
Tests of balances
Substantive tests of transactions
3.
When should auditors not perform alternative procedures in testing the accounts
receivable balance?
When customers do not return positive confirmation requests
When customers do not return negative confirmation requests
When confirmations are deemed to be ineffective as an audit procedure
When confirmations are too costly to use
2
4.
To test for recorded sales for which there were no actual shipments, the auditor
vouches from the:
bill of lading to the sales journal.
sales journal to the shipping documents.
sales journal to the accounts receivable subsidiary ledger.
bill of lading to the supporting customer order and sales order.
5.
Misstatements in the financial statement may not be detected with the increased
use of IT due to:
the loss of a visible audit trail.
reduced human involvement.
I only
II only
both I and II
neither I or II
6.
When assessing whether the financial statements are auditable, the auditor must
consider:
that the integrity of management and the adequacy of accounting records are
the two primary factors determining auditability.
the two primary factors determining auditability.
without a visible audit trail, the company cannot be audited.
7.
Which of the following is most correct with respect to the use of analytical
procedures?
Analytical procedures may be used in evaluating balances in the testing
phase as long as the auditor also uses them in assessing the going concern
assumption.
used to direct an auditor’s attention so that the auditor’s understanding of the
business is improved.
between financial and nonfinancial data.
3
8.
The most reliable evidence from confirmations is obtained when they are sent:
as close to the balance sheet date as possible.
at various times throughout the year to different segments of the sample, so
that the entire sample is representative of account balances scattered
throughout the year.
to perform alternate procedures if they are required.
the sample will not have a time bias.
9.
Prenumbered documents will only be useful for control purposes if:
a different numerical sequence is used for each company.
the sequence is accounted for periodically.
employees are allowed to use documents out of numerical sequence.
the same numerical sequence is used each accounting period.
10.
Which audit tests involve physical examination and confirmation?
Tests of controls
Tests of transactions
Tests of balances
Analytical procedures
11.
Controls that are designed for each software application and are intended to
help a company satisfy the transaction-related audit objectives are:
user controls.
general controls.
audit controls.
application controls.
12.
Which of the following parties is responsible for implementing internal controls
to minimize the likelihood of fraud?
External auditors
Audit committee members
Management
Committee of Sponsoring Organizations
4
13.
When determining what type of report to issue on internal control under Section
404:
an adverse opinion on internal control must be given if any weaknesses in a
key internal control is discovered.
controls.
give a qualified opinion on internal controls.
disclaimer of opinion on internal controls.
14.
Inherent risk is ________ related to detection risk and ________ related to the
amount of audit evidence.
directly, inversely
directly, directly
inversely, inversely
inversely, directly
15.
Which is a liquidity activity ratio?
Profit margin
Inventory turnover
Return on assets
Times interest earned
16.
If an auditor believes the chance of financial failure is high and there is a
corresponding increase in business risk for the auditor, acceptable audit risk
would likely:
be reduced.
be increased.
remain the same.
be calculated using a computerized statistical package.
17.
Which of the following may represent the biggest challenge smaller public
companies face in implementing effective internal control?
A lack of expertise
Reduced importance
Limited resources
Limited available guidance
5
18.
Auditing standards specifically require auditors to identify ________ as a fraud
risk in most audits.
overstated assets
understated liabilities
improper revenue recognition
overstated expenses
19.
Which of the following statements is correct regarding the costs involved in
obtaining evidence?
A.
Physical examination is usually the
least expensive type of audit
evidence
Cost of obtaining evidence may be a
factor in deciding whether to
obtain that evidence
Yes Yes
B.
Physical examination is usually the
least expensive type of audit
evidence
Cost of obtaining evidence may be a
factor in deciding whether to
obtain that evidence
No No
C.
Physical examination is usually the
least expensive type of audit
evidence
Cost of obtaining evidence may be a
factor in deciding whether to
obtain that evidence
Yes No
D.
Physical examination is usually the
least expensive type of audit
evidence
Cost of obtaining evidence may be a
factor in deciding whether to
obtain that evidence
No Yes
20.
Which of the following audit tests would be regarded as a test of controls?
Comparison of the inventory pricing to vendors’ invoices
Tests of the signatures on canceled checks to board of directors’
authorizations
inspections
ledger account
6
21.
Two determinants of the persuasiveness of evidence are:
competence and sufficiency.
relevance and reliability.
appropriateness and sufficiency.
independence and effectiveness.
22.
When setting a preliminary judgment about materiality:
more evidence is required for a low dollar amount than for a high dollar
amount.
amount.
amounts.
needed.
23.
Misappropriation of assets is normally perpetrated by:
members of the board of directors.
employees at lower levels of the organization.
management of the company.
the internal auditors.
24.
Which of the following statements is not true?
Analytical procedures emphasize the overall reasonableness of transactions
and balances.
sufficiently effective to justify reducing control risk and thereby reducing
analytical review procedures.
recorded in the journals and then posted in the general ledger.
ledger.
25.
Sales should be recorded, at the earliest, when:
the order is received.
the order is received and credit is approved.
credit is approved and it is verified that there is enough inventory to fill the
order.
7
26.
Which of the following is not a general control?
Computer performed validation tests of input accuracy.
Equipment failure causes error messages on monitor.
There is a separation of duties between programmer and operators.
There are adequate program run instructions for operating the computer.
27.
The auditors primary purpose in auditing the client’s system of internal control
over financial reporting is:
to prevent fraudulent financial statements from being issued to the public.
to evaluate the effectiveness of the company’s internal controls over all
relevant assertions in the financial statements.
misstatements from appearing on the financial statements.
28.
The predecessor auditor is required to respond to the request of the successor
auditor for information, but the response can be limited to stating that no
information will be provided when:
the predecessor auditor has poor relations with the successor auditor.
the client is dissatisfied with the predecessor’s work.
there are actual or potential legal problems between the client and the
predecessor.
29.
Which of the following statements is not correct?
It is possible to vary the sample size from one unit to 100% of the items in
the population.
increased costs of performing the additional tests.
each audit procedure.
audit.
30.
An auditor is performing a credit analysis of customers with balances over 60
days due. She is most likely obtaining evidence for which audit related
objective?
Realizable value
Existence
Completeness
Occurrence
8
31.
An auditor who accepts an audit engagement and does not possess the industry
expertise of the business entity should:
engage financial experts familiar with the nature of the business entity.
obtain a knowledge of matters that relate to the nature of the entity’s
business.
principal auditor.
32.
When designing audit procedures, tracing of source documents to the
customer’s subsidiary ledger and subsequently to the general ledger is done to
satisfy what assertion?
Valuation
Cutoff
Completeness
Classification
33.
When allocating materiality, most practitioners choose to allocate to:
the income statement accounts because they are more important.
the balance sheet accounts because most audits focus on the balance sheet.
both balance sheet and income statement accounts because there could be
errors on either.
34.
When controls are deemed ineffective and assessed control risk is at the
maximum for a private company, which of the following would normally be
true?
No emphasis is placed on the controls.
Relatively little emphasis is placed on the controls.
Moderate emphasis is placed on the controls.
Heavy emphasis is placed on the controls.
35.
Proper segregation of functional responsibilities calls for separation of:
authorization, execution, and payment.
authorization, recording, and custody.
custody, execution, and reporting.
authorization, payment, and recording.
9
36.
A customer mails and records a check to a client for payment of an unpaid
account on December 30. The client receives and records the amount on
January 2. The records of the two organizations will be different on December
This represents:
A.
A cutoff misstatement A timing difference
Yes Yes
B.
A cutoff misstatement A timing difference
No No
C.
A cutoff misstatement A timing difference
Yes No
D.
A cutoff misstatement A timing difference
No Yes
37.
The most important output control is:
distribution control, which assures that only authorized personnel receive
the reports generated by the system.
should look like.
correct.
38.
Which of the following is not a factor that relates to opportunities to commit
fraudulent financial reporting?
Lack of controls related to the calculation and approval of accounting
estimates
staff
10
39.
You are auditing the company’s purchasing process for goods and services. You
are primarily concerned with the company not recording all purchase
transactions. Which audit procedure below would be the most effective audit
procedure in this case?
Vouching from the accounts payable account to the vendor invoices
Tracing vendor invoices to recorded amounts in the accounts payable
account
account
40.
Based on audit evidence gathered and evaluated, an auditor decides to increase
the assessed level of control risk from that originally planned. To achieve an
overall audit risk level that is substantially the same as the planned audit risk
level, the auditor would:
increase materiality levels.
decrease detection risk.
decrease substantive testing.
increase inherent risk.
Part 2: (worth total of 16 points)
For Part 2, please number your answer sheet from 41 to 50 and provide the letter corresponding
to the best answer (eg, 41. A, 42. B, etc.).
sending the latter to accounts with large balances and the former to those with
small balances.
True
False
in an audit are the auditor’s expectation of misstatements and the objectivity of
the evidence.
True
False
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auditor than violations of the completeness objective.
True
False
engagement between the client and the auditor, but it is optional for private
companies.
True
False
the balance sheet and income statement accounts.
True
False
assessment procedures provides the basis for the auditor’s initial assessment of
control risk.
True
False
to rely on application controls to reduce control risk.
True
False
of an incentives/pressures risk factor.
True
False
True
False
12
audit objective and the existence balance-related audit objective.
True
False
Part 3: (worth total of 10 points)
For Part 3, please number your answer sheet from 51 to 60 and provide the letter corresponding
to the best answer (eg, 51. A, 52. B, etc.).
Below are 10 audit procedures. Classify each audit procedure using one of the following types
of audit evidence: (A) physical examination, (B) confirmation, (C) documentation, (D)
observation, (E) inquiry of the client, (F) reperformance, (G) recalculation, and (H) analytical
procedure.
Type of
Evidence Audit Procedures
whether any month’s total was unusually large.
the purchases journal.
totaled by the client.
cash fund is intact.
end balance on deposit.
procedures are being followed.
reasonableness of gross margin relative to the preceding year.
of client personnel.
was actually received and is in operation.
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