This document outlines audit procedures and assignments for ACC 492, including: - Weekly textbook problems, current issue summaries, team assignments covering auditing of cash, financial instruments, sales, receivables, inventory, payroll, acquisitions, payments, property, and contingencies. - A final exam with multiple choice questions testing understanding of audit sampling, internal controls, audit evidence, and business cycles. The course focuses on auditing various accounts and cycles through application of audit procedures and analysis of current issues.

1. ACC 492 Entire Course (2020 Syllabus)
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ACC 492 Final Exam (All Possible Questions) (2019 Syllabus)
ACC 492 Week 1 Current Issue Summary
ACC 492 Week 1 Current Issue Summary Behind the Numbers Insights
into Large Audit Firm Sampling Policies
(2019 Syllabus)
ACC 492 Week 2 Team Assignment
ACC 492 Week 2 Team Assignment (Amazon)

2. ACC 492 Week 2 Textbook Problem 23-20, 14-20, 14-26 (New
Syllabus 2019)
ACC 492 Week 2 Current Issue Summary Auditing Cash, Financial
Instruments, Sales, or Receivables
ACC 492 Week 2 Current Issue Summary Failing to Find Fraud When
Auditing Cash (2019 Syllabus)
ACC 492 Week 3 Current Issue Summary Auditing Inventory,
Warehouse, or Payroll Cycles

3. ACC 492 Week 3 Current Issue Summary Keep Ghosts off the Payroll
(2019 Syllabus)
ACC 492 Week 3 textbook assignment 20-20, 21-21
ACC 492 Week 3 Team Assignment Inventory, Warehousing, and
Payroll accounts and cycles (Walmart, 2000 Words)
ACC 492 Week 3 Team Assignment Inventory, Warehousing, and
Payroll accounts and cycles (Amazon)
ACC 492 Week 4 Textbook Problem 18-26

4. ACC 492 Week 4 Current Issue Summary auditing acquisitions,
payments, property plant and equipment
ACC 492 Week 4 Current Issue Summary Management’s Report on
Internal Control over Financial Reporting (2019 Syllabus)
ACC 492 Week 4 Team Assignment Acquisition, Payment, Property
Plant, and Equipment Notes Payable and Owner’s Equity and cycles
(Walmart)
ACC 492 Week 4 Team Assignment Acquisition, Payment, Property
Plant, and Equipment Notes Payable and Owner’s Equity and cycles
(Amazon)

5. ACC 492 Week 5 Assignment importance of considering contingent
liabilities, letters from client lawyers (Walmart)
ACC 492 Week 5 Assignment importance of considering contingent
liabilities, letters from client lawyers (Amazon)
ACC 492 Week 5 Final Audit Paper (Walmart)
ACC 492 Week 5 Final Audit Paper (Amazon)
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ACC 492 Final Exam (All Possible Questions) (2020
Syllabus)

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1. Which of the following tests are typically not necessary when auditing
a client’s schedule of recorded disposals?
Footing the schedule.
Tracing schedule totals to the general ledger.
Tracing cost and accumulated depreciation of the disposals to the
property master file.
All of the above are necessary.
2. _______accumulate costs by individual jobs as material is issued into
production and labor costs are incurred.
Just-in-time production systems
Job order cost systems

7. Process cost systems
Manufacturing systems
3. The introductory paragraph of the standard audit report for a non-
public company performs which functions?
I. It states the CPA has performed an audit.
II. It lists the financial statements being audited.
III. It states the financial statements are the responsibility of the
auditor.
I and II
I and III
II and III
I, II and III

8. 4. Auditors are especially concerned with three aspects of internal
control for the sales and collection cycle. Which of the following is not
one of their major concerns?
Controls related to the allowance for uncollectible accounts
Controls that prevent or detect embezzlements
Controls over sales discounts
Controls over cutoff
5. Which of the following accounts is not associated with the acquisition
and payment cycle?
Accrued property taxes
Income tax expense
Common stock
Property, plant and equipment

9. 6. For audit evidence to be compelling to the auditor it must be sufficient
and appropriate. Which statement below is not correct regarding the
appropriateness of audit evidence?
Evidence obtained from independent sources outside the entity is
generally more reliable than evidence secured solely within the entity.
An auditor’s opinion, to be economically useful and profitable to the
auditing firm needs to be formed within a reasonable time and based on
evidence obtained that assures profits for the auditing firm.
The independent auditor’s direct personal knowledge, obtained through
inquiry, observation and inspection, is generally more persuasive than
information obtained indirectly.
The more effective the internal control system, the more assurance it
provides the auditor about the reliability of financial reporting by the
client.
7. A document used by organizations to establish a formal means of
recording and controlling acquisitions which usually contains a package
of documents about the acquisition is the:
voucher.

10. purchase requisition.
purchase order.
receiving report.
8. You are auditing Manufacturing Company and testing the audit
related objective of completeness for the equipment accounts. Which of
the following audit procedures is most likely to achieve your objective?
Trace individual acquisitions to the fixed asset master file.
Physically examine assets.
Examine vendor invoices and receiving reports.
Examine vendor invoices of closely related accounts such as repairs and
maintenance.
9. A sample in which the characteristics of the sample are the same as
those of the population is a(n):

11. random sample.
attributes sample.
variables sample.
representative sample.
10. Which of the following business functions is not considered to be
part of the acquisitions class of transactions?
Recognizing liabilities
Processing purchase orders
Processing cash disbursements
Recognizing liabilities
11. Which of the following is not explicitly stated in the standard
unqualified audit report?

12. The auditors believe that the audit evidence provides a reasonable basis
for their opinion.
The audit was conducted in accordance with generally accepted
accounting principles.
An audit includes assessing the accounting estimates used.
The financial statements are the responsibility of management.
12. When the auditor decides to select less than 100 percent of the
population for testing, the auditor is said to use:
audit sampling.
poor judgment.
estimation sampling.
representative sampling.

13. 13. The ________ is a contract between a carrier (e.g., a trucking
company) and the seller of goods that dictates the details surrounding the
shipment of goods.
sales invoice
remittance advice
picking ticket
bill of lading
14. Which of the following is a correct statement regarding audit
evidence?
A large sample of evidence provided by an independent party is always
considered persuasive evidence.
A small sample of only one or two pieces of highly appropriate evidence
is always considered persuasive evidence.

14. The auditor must obtain a sufficient amount of relevant and reliable
evidence to form an opinion on the fairness of the financial statements.
Evidence is usually more reliable for balance sheet accounts when it is
obtained within six months of the balance sheet date.
15. Which of the following statements is not correct?
The decision of how many items to test must be made by the auditor for
each audit procedure.
The decision of how many items to test should not be influenced by the
increased costs of performing the additional tests.
The sample size for any given procedure is likely to vary from audit to
audit.
It is possible to vary the sample size from one unit to 100% of the items
in the population.
16. Which of the following is not one of the business functions for the
payroll and personnel cycle?

15. Payment of payroll
Reconciliation of payroll account
Timekeeping and payroll preparation
Human resources and employment
17. One unique characteristic of the capital acquisition and repayment
cycle is that relatively few transactions affect the account balances, but
each transaction is often highly material in amount.
True
False
18. The audit procedure that requires an auditor to “foot the acquisition
schedule” relates to which balance-related audit objective?
Classification

16. Detail tie-in
Existence
Cut-off
19. Which of the following does not have to be considered in
determining the initial sample size of a test of details?
Acceptable risk of incorrect rejection
Tolerable misstatement
Acceptable audit risk
Estimate of misstatements in the population
20. Because cash is the most desirable asset for people to steal, it has a
higher:
liquidity risk.

17. detection risk.
control risk.
inherent risk.
21. The two primary classes of transactions in the sales and collection
cycle are:
sales and cash receipts.
sales and sales returns.
sales and accounts receivable.
sales and sales discounts.
22. Master files, spreadsheets, and reports that accumulate material,
labor, and overhead as the costs are incurred are:

18. accounting systems
storeroom documents
cost accounting records
finished goods inventory records.
23. Which of the following expenses is not typically evaluated as part of
the audit of the acquisition and payment cycle?
Depreciation expense
Insurance expense
Bad debts expense
Property tax expense.
24. Smaller privately held companies may not maintain an accounts
payable master file by vendor. These companies pay on the basis of:

19. Vendor’s monthly statements
Individual vendor’s invoices
The account payable account in the general ledger
During letters
25. The word below that best explains the relationship between required
sample size and the acceptable risk of incorrect acceptance is:
Inverse.
Direct.
Proportional.
Indeterminate.
26. Which of the following balance-related audit objectives typically is
assessed as having high inherent risk for cash?
Existence

20. Cutoff
Detail tie-in
Presentation and disclosure
27. The final step in the evaluation of the audit results is the decision to:
project the point estimate.
determine sampling error and calculate the estimated total population
error.
determine the error in each sample.
accept the population as fairly stated or to require further action.
28. The computer file used for recording payroll transactions for each
employee and maintaining total wages paid for the year to date is the:
payroll transaction file.

21. payroll master file.
payroll bank account reconciliation.
payroll tax returns.
29. The computer-generated file which records acquisitions,
disbursements and allowances for each vendor is the:
Cash disbursements file.
Accounts payable master file.
Purchase approval file.
Acquisitions transaction file.
30. Which of the following groups has the responsibility for identifying
and deciding the appropriate accounting treatment for recording or
disclosing contingent liabilities?

22. Management and the auditors
Management
Legal counsel
Auditors
31. The standard unqualified audit report for a non-public entity must:
Have a report title that includes the word "CPA."
Be addressed to the company's stockholders and creditors.
Be dated.
Include an explanatory paragraph
32. The appropriate and sufficient evidence to be obtained from tests of
details must be decided on an:

23. Efficiency basis.
Effectiveness basis.
Audit objectives basis.
None of the above
33. You are auditing Rodgers and Company. You are aware of a
potential loss due to non-compliance with environmental regulations.
Management has assessed that there is a 40% chance that a $10M
payment could result from the non-compliance. The appropriate
financial statement treatment is to:
Accrue a $4 million liability.
Disclose a liability and provide a range of outcomes.
Since there is less than a 50% chance of occurrence, ignore.
Since there is greater that a remote chance of occurrence, accrue the $10
million
33. To determine if a sample is truly representative of the population, an
auditor would be required to:

24. conduct multiple samples of the same population.
never use sampling because of the expense involved.
audit the entire population.
use systematic sample selection
34. Auditors seldom learn about the capital acquisition and repayment
cycle when gaining an understanding of the client’s business and
industry.
True
False
35. The total of the individual employee earnings in the payroll master
file should equal the total:
of the checks drawn to employees for payroll.
balance of gross payroll in general ledger accounts.

25. gross pay for the current week’s payroll.
gross payroll plus the total contributed by the employer for payroll taxes.
36. When auditing the capital acquisition and repayment cycle, it is
common to verify each transaction taking place in the cycle for the
entire year as a part of verifying the balance sheet accounts.
True
False
37. In most manufacturing companies, the inventory and warehousing
cycle begins with the:
acquisition of raw materials for production of an order.
initiation of production of a customer’s order.
receipt of a customer’s order.

26. completion of production of a customer’s order.
38. Some companies have customers send payments directly to an
address maintained by a bank. This is called a(n) ________ system.
direct deposit
funds transfer
lockbox
interbank transfer
39. A commitment is best described as:
an agreement to commit the firm to a set of fixed conditions in the
future.
a potential future obligation to an outside party for an as yet to be
determined amount.

27. an agreement to commit the firm to a set of fixed conditions in the future
that depends on current market conditions.
an agreement to commit the firm to a set of fixed conditions in the future
that depends on company profitability.
40. The management’s responsibility section of the standard audit report
for a non-public company states that the financial statements are:
none of the above.
the responsibility of management.
the responsibility of the auditor.
the joint responsibility of management and the auditor.
41. Which of the following is an analytical procedure to determine if
there is idle equipment or equipment that was disposed of but not written
off?
Compare annual repairs and maintenance accounts with previous years.

28. Compare gross manufacturing cost divided by some measure of
production with previous years.
Compare accumulated depreciation divided by gross equipment cost
with previous years.
Compare depreciation expense divided by gross equipment cost with
previous years.
42. Accrued payroll taxes are normally considered to be associated with
the acquisition and payment cycle.
True
False
43. Which of the following is a business function related to sales returns
and allowances?
Processing customer orders

29. Writing off uncollectible accounts
Processing and recording credit memos
Granting credit
44. In addition to confirming bank balances of your audit client, a bank
confirmation would normally contain:
the client’s bank loans with due date, interest rate, and collateral
requested.
the client’s business prospects.
the client’s credit history as regards to paying back loans.
the client’s managements bank account information.
45. Which of the following audit procedures would be the most correct
in determining the audit objective of existence for the equipment
account in the fixed asset master file?

30. Examine vendor invoices and receiving reports.
Examine vendor invoices for correct accounting treatment.
Recalculate vendor invoices.
Review transactions near the balance sheet date.
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ACC 492 Week 2 Current Issue Summary Failing to Find
Fraud When Auditing Cash (2020 Syllabus)
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ACC 492 Week 2 Current Issue Summary
Write a 175- to 350-word summary.
Research a recent article on auditing cash, financial instruments, sales,
or receivables.

31. Apply what you learn to your future or current job.
Click the Assignment Files tab to submit your assignment in a
Microsoft® Word document
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ACC 492 Week 2 Textbook Problem 23-20, 14-20, 14-26
(New Syllabus 2020)
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23-20 (Objectives 23-3, 23-4) The following are misstatements that
might be found in the client's year-end cash balance (assume that the
balance sheet date is June 30):
1.The outstanding checks on the June 30 bank reconciliation were
underfooted by $2,000.
2.A loan from the bank on June 26 was credited directly to the client's
bank account. The loan was not entered as of June 30.
3.A check was omitted from the outstanding check list on the June 30
bank reconciliation. It cleared the bank July 7.

32. 4.A check was omitted from the outstanding check list on the bank
reconciliation. It cleared the bank September 6.
5.Cash receipts collected on accounts receivable from July 1 to July 5
were included as June 29 and 30 cash receipts.
6.A bank transfer recorded in the accounting records on July 1 was
included as a deposit in transit on June 30.
7.A check that was dated June 26 and disbursed in June was not
recorded in the cash disbursements journal, but it was included as an
outstanding check on June 30.
Required
a.Assuming that each of these misstatements was intentional (fraud),
state the most likely motivation of the person responsible.
b.What control can be instituted for each fraud to reduce the likelihood
of occurrence?
c.List an audit procedure that can be used to discover each fraud.

33. 14-23 (Objectives 14-1, 14-3) The following questions deal with audit
evidence for the sales and collection cycle. Choose the best response.
a. An auditor is performing substantive tests of transactions for
sales. One step is to trace a sample of debit entries from the accounts
receivable master file back to the supporting duplicate sales invoices.
What will the auditor intend to establish by this step?
b. Which audit procedure is most effective in testing credit sales for
overstatement?
.
c. To determine whether internal control relative to the revenue
cycle of a wholesaling entity is operating effectively in minimizing the
failure to prepare sales invoices, an auditor would most likely select a
sample of transactions from the population represented by the

34. 14-26 (Objectives 14-3, 14-4, 14-5) The following are commonly
performed tests of controls and substantive tests of transactions audit
procedures in the sales and collection cycle:
1. Account for a sequence of shipping documents and examine each one
to make sure that a duplicate sales invoice is attached.
2. Account for a sequence of sales invoices and examine each one to
make sure that a duplicate copy of the shipping document is attached.
3. Compare the quantity and description of items on shipping documents
with the related duplicate sales invoices.
4. Trace recorded sales in the sales journal to the related accounts
receivable master file and compare the customer name, date, and amount
for each one.
5. Examine sales returns for approval by an authorized official.

35. 6. Review the prelisting of cash receipts to determine whether cash is
prelisted daily.
7. Reconcile the recorded cash receipts on the prelisting with the cash
receipts journal and the bank statement for a 1-month period.
Required
a. Identify whether each audit procedure is a test of control or a
substantive test of transactions.
b. State which of the six transaction-related audit objectives each of the
audit procedures fulfills.
c. Identify the type of evidence used for each audit procedure, such as
inspection and observation.