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Explain what is meant by an imprest payroll account. What is its purpose as a control over payroll?
Explain why it is common to verify total officers' compensation even when the tests of controls and substantive tests of transactions results in payroll.
Is approval by a department head or foreman required for all time cards before they are submitted for payment?
Recompute hours on the time card and compare the total with the total hours for which the employee has been paid.
The payroll clerk manually prepares payroll checks but often forgets to record one or two checks in the computer-prepared payroll journal.
Discuss with management any payroll liabilities recorded in the prior year that are not provided for in the current period.
Are the audit procedures performed by Alyssa sufficient to test accrued payroll tax, vacation pay, and bonuses?
State the relationship between the TER and sample size.
Assume that the auditor has selected 100 sales invoices from a population of 100,000 to test for an indication of internal verification of pricing.
When the CUER exceeds the TER, what courses of action are available to the auditor?
State an effective audit procedure for testing whether shipments have been billed. What is the sampling unit for the audit procedure?
Examine evidence on sales invoice that the prices were agreed to the approved price list.
Calculate SER for each of columns 1 through 4 and use this to calculate the actual allowance for sampling risk.
What is the most appropriate sampling unit for conducting most of the audit sampling tests?
What is the nature of most infrequently operating controls, and why is it important for the auditor to test these controls?
Distinguish among tests of details of balances, tests of controls, and substantive tests of transactions for the sales and collection cycle.
I do not believe in performing tests of controls and substantive tests of transactions for the sales and collection cycle.
Identify the eight accounts receivable balance-related audit objectives.
Distinguish between accuracy tests of gross accounts receivable and tests of the realizable value of receivables.
State the purpose of footing the total column in the client's accounts receivable trial balance, tracing individual customer names and amounts to the accounts.
In many audits in which accounts receivable is material, the requirement of confirming customer balances is a waste of time and would not be performed.
Explain why it is common for auditors to send confirmation requests to vendors with "zero balances" on the client's accounts payable .
Explain why most auditors consider the receipt of goods and services the most important point in the acquisition and payment cycle.
It is less common to confirm accounts payable at an interim date than accounts receivable. Explain why.
In testing the cutoff of accounts payable at the balance sheet date, explain why it is important that auditors coordinate their tests.