Question

37. As a test of the occurrence transaction-related audit objective for sales and the accuracy balance-related audit objective for accounts receivable, auditors can use audit data analytics to match, for example, cash receipts to invoiced sales amounts. TRUE OR FALSE

43. Accounting principles do not require companies to record bad debt expense for the amount of customer receivables on the balance sheet they do not expect to collect until the customer has declared bankruptcy or after the customer's account has been turned over to a collection agency. TRUE OR FALSE

44. When generating random number, the random numbers must be obtained with replacement. TRUE OR FALSE

47. For audit clients having a treasurer, the auditor should inquire whether the treasurer has reviewed the financial statement disclosures related to cash receipts for relevance and understandability. TRUE OR FALSE

Answer 1

37. True- Auditor can match cash receipts to invoiced sales amounts for finding out the balace accounts receivables.

43. True- Bad debts should be declared in balacesheet only after the customer has declared bankruptcy or account has been turned over to collection angency. However, Accounting principles require companies to declare specific percentage as Doubtfull debts in balancesheet based on reaceivables.

44. False- Random numbers can also be obtainted without recplacement.

47. True. the auditor should inquire about the authenticity of financial statement if the client have a treasuer. Treasure should review financial statements before disclosing.