Question:
Question 29
Assertions about classes of transactions and events typically include _______.
-completeness, accuracy, and valuation
-existence, rights, and cutoff
-existence, rights, and obligations
-occurrence, cutoff, and completeness
Question 30
Assertions about account balances at year-end typically include _______.
-existence, occurrence, and cutoff
-existence, completeness, and allocation
-existence, completeness, and rights and obligations
-accuracy, valuation, and occurrence
Question 31
Assertions about presentation and disclosure typically include _______.
-cutoff, presentation, and disclosure
-completeness, accuracy and valuation, and classification and understandability
-cutoff, accuracy, and valuation
-existence, rights and obligations, and cutoff
Question 32
If the auditor determines that internal controls are not functioning as designed, and a compensating control does not exist, the auditor will assess control risk and the risk of material misstatement (RMM) as_______.
-low and set detection risk as high
-low and set detection risk as low
-high and set detection risk as high
-high and set detection risk as low
Question 33
If significant fraud risk exists, the auditors should _______.
-plan to place greater reliance on the internal audit function
-be able to place greater reliance on management assertions
-respond by including elements of predictability in their audit plan
-respond by including elements of unpredictability in their audit plan
Question 34
For clients with multiple locations, the auditors_______.
-could not vary which locations are tested each year, but instead vary the type of audit procedures that are performed at the different locations
-should always hire another auditor to check other locations, and not attempt to do this themselves
-could vary which locations are tested each year and the type of audit procedures that are performed at the different locations
-could vary which locations are tested each year and not change the type of audit procedures that are performed at the different locations
Question 35
When analytical procedures are used to obtain audit evidence during the risk response phase, _______.
-they are referred to as tests of internal control
-the audit report is ready to be issued
-they are referred to as "substantive analytical procedures."
-management should be allowed to select the procedures and tests
Question 36
Every audit will involve _______.
-conflicts with management pertaining to estimates
-some amount of substantive testing because audit standards require it for relevant assertions
-relying on the internal audit function for production of evidentiary matter
-no substantive testing because audit standards require it not to be conducted for relevant assertions
Question 37
A dual-purpose test _______.
-involves satisfying informational requests from management and the client's legal counsel simultaneously
-involves the auditor being able to bill the client for two tests when only one was performed
-involves the auditors designing a test of controls and a substantive test of details to be performed at the same time on the same transaction
-involves the auditors designing a test of controls and a substantive test of details to be performed at the same time on different transactions
Question 38
Some substantive procedures can only be performed at year-end _______.
-once the internal audit function has completed its preliminary testing of the account
-due to the nature of the assertion or the timing of the transactions
-due to management not allowing the auditors access beforehand
-because there have been no transactions occurring in these accounts during the year
SOLUTION IS-
29. D - occurrence, cutoff, and completeness
30. C - existence, completeness, and rights and obligations
31. B - completeness, accuracy and valuation, and classification and understandability
32. D - high and set detection risk as low
33. D - respond by including elements of unpredictability in their audit plan
34. C - could vary which locations are tested each year and the type of audit procedures that are performed at the different locations.
35. C - they are referred to as "substantive analytical procedures.
36. B - some amount of substantive testing because audit standards require it for relevant assertions
37. C - involves the auditors designing a test of controls and a substantive test of details to be performed at the same time on the same transaction
38. B - due to the nature of the assertion or the timing of the transactions
Question: Question 29 Assertions about classes of transactions and events typically include _______. -completeness, accuracy, and...
6.Assertions about classes of transactions and events typically include _______. A. occurrence, cutoff, and completeness B. existence, rights, and obligations C. existence, rights, and cutoff D. completeness, accuracy, and valuation
Question 10 Assertions about account balances at year-end typically include _______. A. existence, completeness, and allocation B. existence, completeness, and rights and obligations C. existence, occurrence, and cutoff D. accuracy, valuation, and occurrence
Now that you have identified the revenue-related internal control that relates to the five assertions (existence, completeness, accuracy or valuation, rights and obligations, and presentation and disclosure), the test of controls will need to be identified for each assertion and internal control. For this assignment, you will write and submit 400-500 words that set specific tests of internal controls for the 5 internal controls related to management assertions that you identified (existence, completeness, accuracy or valuation, rights and obligations, and...
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For each of the following specific audit procedures, identify the category (assertions about classes of transactions and events or assertions about account balances) and the primary assertion being tested. a. Sending a written request to the entity's customers requesting that they report the amount owed to the entity. b. Examining large sales invoices for a period of two days before and after year-end to determine if sales are recorded in the proper period. c. Agreeing the total of the accounts...
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Apart from the Inventory account, which other accounts and assertions are at risk of material misstatement for DD, and why? What impact does the control risk assessment have on inherent risk and detection risk? What is the auditor's preliminary assessment of control risk and why? What impact does the control risk assessment (from the previous question) have on inherent risk and detection risk? Which assertion is at risk for the inventory account? Select one: a. rights & obligations b. accuracy,...