Question

To obtain evidence on the completeness assertion for revenue, the auditor would select a sample of...

To obtain evidence on the completeness assertion for revenue, the auditor would select a sample of shipping documents and trace them to the sales journal

True
False


When conducting analytical audit procedures including analytical account analysis the auditor is not looking for account relationships that do not appear logical but rather absolute changes in account values.

True
False

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1) False

Only obtaining shipping documents and tracing them in the sales journal would not sufice in order to examine the completeness of the revenue earned. Auditor must verify alongwith the above stated items, quotations received, sales order, invoices, contracts, and goods delivery documents.

2) False

Analytical procedures involve different sets of financial and operational information, to see if historical relationships are continuing forward in the period under review. These relationships must remain consistent overtime. For example, the relationship in sales and receivables must remain around the same overtime, unless there is a change in customer base.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
14-22 (Objectives 14-2 , 14-3) The following questions deal with internal control and audit evidence in...
14-22 (Objectives 14-2 , 14-3) The following questions deal with internal control and audit evidence in the sales and collection cycle. Choose the best response. 1.Tracing shipping documents to sales invoices provides evidence that a. sales billed to customers were actually shipped. b.shipments to customers were properly invoiced. c. shipments to customers were recorded as sales. d. all goods ordered by customers were shipped. 2. Which of the following procedures most likely represents an internal control designed to reduce the...
Below are audit procedures for the sales and collection, and acquisition and payments cycles. In each...
Below are audit procedures for the sales and collection, and acquisition and payments cycles. In each case, indicate the type of audit procedure (e.g. test of control, analytical procedure, substantive test of transactions, or test of details of balances), the transaction-related or balance-related audit objective and type of evidence (e.g. documentation, observation etc.). 1. Trace recorded sales transactions to shipping documents to determine whether a document exists. 2. Obtain a prelisting of cash receipts and trace amounts to the cash...
9.In statistical sampling for tests of controls, determining the appropriate confidence level and desired precision are...
9.In statistical sampling for tests of controls, determining the appropriate confidence level and desired precision are decisions made by the auditor that will affect sample size for the test. Which of the following should TYPICALLY not factor into sample size when performing statistical sampling for test of controls? A. desired sampling risk B. population size C. audit resources available for execution of the sampling plan D. objective of the test E. Both b&c F. Both c&d 10. An auditor’s tolerable...
Auditors frequently refer to the terms principles and procedures. Required: Auditors use different types of audit...
Auditors frequently refer to the terms principles and procedures. Required: Auditors use different types of audit procedures to gather the evidence necessary to conclude that the risk of material misstatement for each relevant assertion has been reduced to an acceptably low level. Identify the type of procedure used by auditors for each of the following examples. (1) Find brokers' invoices and canceled checks showing agreement with record amounts for securities investments. (2) Observe test counting of client's physical inventory taking...
An important aspect of analyzing a client’s information is the use of ratios. Which one of...
An important aspect of analyzing a client’s information is the use of ratios. Which one of the following statements is true? Question 14 options: a) The proper ratios to use to determine if a company can meet existing obligations as they become due are the debt-to-equity and profit margin ratios. b) The most useful analytical tools to assess long-run solvency include the debt-to-equity ratio. c) When return on equity or return on investments is the critical concern, the most useful...
Items 1 through 10 represent possible errors and fraud that an auditor suspects are present. The...
Items 1 through 10 represent possible errors and fraud that an auditor suspects are present. The accompanying List of Auditing Procedures that the auditor would consider performing to gather evidence concerning possible errors and fraud. For each item, select one or two procedures, as indicated, that the auditor most likely would perform to gather evidence in support of that item and explain why you choose. Possible misstatements due to error and fraud 1. The auditor suspects that the controller wrote...
The following independent scenarios describe auditor decisions made during an audit engagement. 1. Chen Li worked...
The following independent scenarios describe auditor decisions made during an audit engagement. 1. Chen Li worked on the audit of American Healthcare Associations (AHA), which operates hospitals and outpatient centers in Texas and Oklahoma. Chen was assigned responsibility to audit the allowance for patient receivables. For the past several years, AHA’s accounting policy required that the recorded allowance for patient receivables be set to equal the total amount of receivables over 180 days past due. Prior audit testing of the...
11B-3 Keystone Computers & Networks, Inc. (KCN), has 933 accounts receivable, with a total book value...
11B-3 Keystone Computers & Networks, Inc. (KCN), has 933 accounts receivable, with a total book value of $10,235,457. From that population, Adams, Barnes & Co. (ABC), CPAs, selected a sample of 260 accounts (142 unique accounts) for confirmation for the year ended December 31, 20X5, as illustrated by the working paper on page 503. First and second confirmation requests resulted in replies for all but 10 of those accounts. ABC performed alternative procedures on those 10 accounts and noted no...
Item 1 In the case below, the original source material is given along with a sample...
Item 1 In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button. Original Source Material Student Version In contrast to the transmittal model illustrated by the classroom lecture-note taking scenario, the constructivist model places students at the center of the process--actively participating in thinking and discussing ideas while making meaning for themselves. And the professor, instead of being the "sage on the...
During the trial, lawyers for the accused said that the men believed that the accounting decisions...
During the trial, lawyers for the accused said that the men believed that the accounting decisions they made were appropriate at the time, and that the accounting treatment was approved by Nortel’s auditors from Deloitte & Touche. Judge Marrocco accepted these arguments. Marrocco added he was “not satisfied beyond a reasonable doubt” that the trio (i.e., Dunn, Beatty, and Gollogly) had “deliberately misrepresented” financial results. Given the facts of the case, do you believe Judge Marrocco’s decision was justified? Explain....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT