Assignment
QUESTION 1
An auditor traced a sample of purchase orders and the related receiving reports to thepurchases journal and the cash disbursements journal. The purpose of this substantiveaudit procedure most likely was to
Verify that cash disbursements were for goods actually received
Verify that purchase orders were issued for all goods received
Determine that purchases were properly recorded
Identify unusually large purchases that should be investigated further
QUESTION 2
An auditor finds several errors in the financial statements that the client prefers not to correct. The auditor determines that the errors are not material in the aggregate. Which of the following actions by the auditor is most appropriate?
Document the errors in the summary of uncorrected errors, and document the conclusion thatthe errors do not cause the financial statements to be misstated.
Document the conclusion that the errors do not cause the financial statements to be misstated,but do not summarize uncorrected errors in the working papers.
Summarize the uncorrected errors in the working papers, but do not document whether theerrors cause the financial statements to be misstated.
Do not summarize the uncorrected errors in the working papers, and do not document aconclusion about whether the uncorrected errors cause the financial statements to be misstated.
QUESTION 3
Which of the following procedures would be most appropriate for testing the completeness assertion as it applies to inventory?
Scanning perpetual inventory, production, and purchasing records.
Examining paid vendor invoices.
Tracing inventory items from the tag listing back to the physical inventory quantities.
Performing cutoff procedures for shipping and receiving.
QUESTION 4
During the confirmation of accounts receivable, an auditor receives a confirmation via the client's fax machine. Which of the following actions should an auditor take?
Not accept the confirmation and select another customer's balance to confirm
Not accept the confirmation and treat it as an exception.
Accept the confirmation and file it in the working papers.
Accept the confirmation but verify the source and content through a telephone call to the respondent.
QUESTION 5
Which of the following tests of details most likely would help an auditor determine whether accounts payable have been misstated?
Examining reported purchase returns that appear too low.
Examining vendor statements for amounts not reported as purchases.
Searching for customer-returned goods that were not reported as returns.
Reviewing bank transfers recorded as cash received from customers.