Homework Answers
C.Reliablity.
This refers to the extent to which evidence can be believable or worthy of trust; sometimes reliability is interchanged with competence.
Competence of evidence deals only with the audit procedures selected. It isn't improved by selecting larger sample size or different population items. It can be improved only by selecting audit procedures that contain higher quality of characteristics of competent evidence.
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16. As a test of sales for completeness (i.e. understatement), an auditor selects 50 sales recorded...
The auditor selects a sample of recorded sales invoices and vouches them to shipping documents. This...
The auditor selects a sample of recorded sales invoices and vouches them to shipping documents. This procedure is related to which of the following assertions?
An auditor wishes to test the completeness assertion for sales. Which of the following audit tests...
An auditor wishes to test the completeness assertion for sales. Which of the following audit tests would most likely accomplish this objective? 1. Select a sample of shipments occurring during the year and trace each one to inclusion in the sales journal. 2. Select large individual sales recorded during the year and review supporting documentation. 3. Compare accounts receivable turnover (net credit sales/average gross receivables) in the current year to that achieved in the prior year. 4. Use common size...
16. When may audit procedures be performed? I - on the balance sheet date. II -...
16. When may audit procedures be performed? I - on the balance sheet date. II - prior to the balance sheet date. III - subsequent to the balance sheet date. a. I only. b. I and III only c. II only. d. I, II, and III. ANSWER: 17. An auditor selects a sample of items recorded and traces them back to the supporting documentation. This is an example of which of the following? a. Directional testing for existence. b. Directional...
asap clearly pls Chapter 5 1. Evidence should be relevant and reliable to be appropriate. Define...
asap clearly pls
Chapter 5 1. Evidence should be relevant and reliable to be appropriate. Define the terms "Relevance" and "Reliability" II. For each situation presented below, indicate which means of gathering evidence would be considered more reliable (#1 or #2) AND indicate a reason from the following list: A. Independent source of the information (Independence of provider); B. auditor's direct knowledge; C. Knowledgeable source (qualifications of individual providing the information); D. degree of objectivity versus subjectivity; and E. Functioning...
1.To conclude that a management review control is effective, the auditor is required to identify a...
1.To conclude that a management review control is effective, the auditor is required to identify a selection of instances in which the control operated, evaluate whether management followed the procedures specified by the control, and properly evaluated and resolved exceptions. A) True B) False 2. Which of the following statements about substantive analytical procedures is correct? A) The results of the procedure provide evidence about the existence or absence of misstatement in an account. B) The results of the procedure...
vided the procedure (1-9) the auditor could implement to test the operating electiveness of the Internal...
vided the procedure (1-9) the auditor could implement to test the operating electiveness of the Internal control Select from the option list provided the procedure (1-9) the following situations. Each choice may be used once, more than once, or not at all. 1. Match prenumbered shipping documents with entries in the sales journal. 2. Trace sales invoices to account receivable subsidiary ledger 3. Vouch bill of lading file to approved sales invoices. 4. Observe client comparing receiving quantities, and inspect...
1. Consider the following statements: I. Lapping involves covering a theft related to accounts receivable...
1. Consider the following statements: I. Lapping involves covering a theft related to accounts receivable by using a later cash receipt to cover the previous theft. II. A “positive confirmation” requests that customers respond whether they agree or not with the amount due to the entity stated in the confirmation. a. I is true; II is true b. I is true; II is false c. I is false; II is true d....
Worthington Department Stores Auditing standards require the auditor to obtain sufficient appropriate audit evidence (AS 1105.04:...
Worthington Department Stores Auditing standards require the auditor to obtain sufficient appropriate audit evidence (AS 1105.04: Audit Evidence). The audit firm of Hepple & Ramsey was investigated for the audit of Worthington. Worthington is a large discount catalog department store chain. The company recently expanded from 6 to 43 stores by borrowing from several large financial institutions and from a public offering of common stock. A recent investigation has disclosed that Worthington materially overstated net income. This was accomplished by...
5-1 -2 -4 545. Multiple Choice Questions Select the best answer for each of the following...
5-1 -2 -4 545. Multiple Choice Questions Select the best answer for each of the following questions. Explain the reasons for your selection a. Which of the following is not a financial statement assertion made by management? (1) Existence of recorded assets and liabilities. (2) Completeness of recorded assets and liabilities. (3) Valuation of assets and liabilities. (4) Effectiveness of internal control b. Which of the following business characteristics is not indicative of high inherent risk? (1) Operating results that...
16. When may audit procedures be performed? I - on the balance sheet date. II - prior to the balance sheet date. III - subsequent to the balance sheet date. a. I only. b. I and III only c. II only. d. I, II, and III. ANSWER: 17. An auditor selects a sample of items recorded and traces them back to the supporting documentation. This is an example of which of the following? a. Directional testing for existence. b. Directional...
asap clearly pls
Chapter 5 1. Evidence should be relevant and reliable to be appropriate. Define the terms "Relevance" and "Reliability" II. For each situation presented below, indicate which means of gathering evidence would be considered more reliable (#1 or #2) AND indicate a reason from the following list: A. Independent source of the information (Independence of provider); B. auditor's direct knowledge; C. Knowledgeable source (qualifications of individual providing the information); D. degree of objectivity versus subjectivity; and E. Functioning...
vided the procedure (1-9) the auditor could implement to test the operating electiveness of the Internal control Select from the option list provided the procedure (1-9) the following situations. Each choice may be used once, more than once, or not at all. 1. Match prenumbered shipping documents with entries in the sales journal. 2. Trace sales invoices to account receivable subsidiary ledger 3. Vouch bill of lading file to approved sales invoices. 4. Observe client comparing receiving quantities, and inspect...
5-1 -2 -4 545. Multiple Choice Questions Select the best answer for each of the following questions. Explain the reasons for your selection a. Which of the following is not a financial statement assertion made by management? (1) Existence of recorded assets and liabilities. (2) Completeness of recorded assets and liabilities. (3) Valuation of assets and liabilities. (4) Effectiveness of internal control b. Which of the following business characteristics is not indicative of high inherent risk? (1) Operating results that...
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