This document contains 15 multiple choice questions related to auditing. It tests knowledge of topics like attribute sampling, assessing control risk, risks in substantive testing, computer-assisted audit techniques, reporting on internal controls, and integrated audits of issuers. For each question, the correct answer is provided along with a brief explanation. The questions cover a range of auditing concepts and help assess understanding of key ideas in auditing and attestation.
- An auditor observed a client employee preparing a schedule of past due accounts receivable to obtain evidence about the effective operation of controls over accounts receivable. Observing this process provided evidence about how the control was applied.
- When customer payments are received, a remittance listing should be prepared and sent to the accounts receivable clerk to update the subsidiary accounts receivable records.
- An auditor tested a client's control over obtaining credit approval before shipping goods to customers. This helped support management's assertion that accounts receivable are properly valued, as credit approval helps ensure receivables will be collectible.
This document contains 12 multiple choice questions about auditing and attestation standards. The questions cover topics such as elements of a CPA firm's quality control system, the relationship between quality control and professional standards, auditor's reports for cash basis financial statements, issuing opinions on specific financial statement elements when the financial statements taken as a whole are disclaimed, procedures performed in compilation and review engagements, and objectives of interim financial statement reviews. The document provides the questions, answers, and explanations for each question.
1. The document contains multiple choice questions and answers related to auditing and attestation.
2. It addresses topics like the responsibilities of successor and predecessor auditors, components of audit risk, analytical procedures, internal controls, detecting fraud, and illegal acts.
3. The questions test understanding of key auditing concepts and judgments, such as what documents include discussions of audit limitations, how risk assessments impact audit procedures, and when an auditor would withdraw from an engagement.
The document contains sample questions and answers from an auditing and attestation class. The questions cover topics like the auditor's standard report, scope limitations, departures from GAAP, and types of audit opinions. For one question, the auditor would issue an unqualified opinion if a contingent liability was probable but not estimable and was disclosed in footnotes. For another, a qualified opinion would be appropriate if financial statements had an inadequate disclosure. The document provides explanations for the answers.
Here are potential risk factors related to each information item:
a. No significant risk factors
b. Control by majority shareholder who is also CEO could lead to undue influence over financial reporting
c. Internal audit reporting to controller who reports to CEO compromises independence and could affect identification and reporting of issues
d. High turnover in accounting department could affect quality and consistency of financial reporting
e. Regular monitoring by bank could deter some fraudulent financial reporting
f. No significant risk factors
g. Strong market position could provide opportunities to manipulate terms of transactions to achieve financial reporting goals
h. Change in accounting basis increases risk of error and possibility of manipulation during transition
i. Investment where TWD retains significant influence is a related
This document contains 49 multiple choice questions about risk assessment and internal control evaluation. It covers topics such as the auditor's responsibility regarding internal controls, separation of duties, control activities, obtaining an understanding of internal controls, control risk assessment, tests of controls, and internal control deficiencies.
(New) acc 460 acc460 final exam entire answers with questions correct 100%twiter343r
This document provides 30 multiple choice questions that appear to be from a final exam for an accounting course. The questions cover a range of topics including generally accepted accounting principles, assertions, materiality, internal controls, auditing standards, auditor responsibilities and communication.
The audit of 494 medical records found issues in billing and coding accuracy. Only 63.16% of records were accurately coded, below the target 95% accuracy rate. Financial errors resulted in $1,925 undercoding and $5,375 overcoding. Documentation was insufficient in 31 claims. Providers lacked documentation to support billed E/M levels and diagnoses. Opportunities included preventative medicine billing, E/M level documentation, and implementing coding reviews.
- An auditor observed a client employee preparing a schedule of past due accounts receivable to obtain evidence about the effective operation of controls over accounts receivable. Observing this process provided evidence about how the control was applied.
- When customer payments are received, a remittance listing should be prepared and sent to the accounts receivable clerk to update the subsidiary accounts receivable records.
- An auditor tested a client's control over obtaining credit approval before shipping goods to customers. This helped support management's assertion that accounts receivable are properly valued, as credit approval helps ensure receivables will be collectible.
This document contains 12 multiple choice questions about auditing and attestation standards. The questions cover topics such as elements of a CPA firm's quality control system, the relationship between quality control and professional standards, auditor's reports for cash basis financial statements, issuing opinions on specific financial statement elements when the financial statements taken as a whole are disclaimed, procedures performed in compilation and review engagements, and objectives of interim financial statement reviews. The document provides the questions, answers, and explanations for each question.
1. The document contains multiple choice questions and answers related to auditing and attestation.
2. It addresses topics like the responsibilities of successor and predecessor auditors, components of audit risk, analytical procedures, internal controls, detecting fraud, and illegal acts.
3. The questions test understanding of key auditing concepts and judgments, such as what documents include discussions of audit limitations, how risk assessments impact audit procedures, and when an auditor would withdraw from an engagement.
The document contains sample questions and answers from an auditing and attestation class. The questions cover topics like the auditor's standard report, scope limitations, departures from GAAP, and types of audit opinions. For one question, the auditor would issue an unqualified opinion if a contingent liability was probable but not estimable and was disclosed in footnotes. For another, a qualified opinion would be appropriate if financial statements had an inadequate disclosure. The document provides explanations for the answers.
Here are potential risk factors related to each information item:
a. No significant risk factors
b. Control by majority shareholder who is also CEO could lead to undue influence over financial reporting
c. Internal audit reporting to controller who reports to CEO compromises independence and could affect identification and reporting of issues
d. High turnover in accounting department could affect quality and consistency of financial reporting
e. Regular monitoring by bank could deter some fraudulent financial reporting
f. No significant risk factors
g. Strong market position could provide opportunities to manipulate terms of transactions to achieve financial reporting goals
h. Change in accounting basis increases risk of error and possibility of manipulation during transition
i. Investment where TWD retains significant influence is a related
This document contains 49 multiple choice questions about risk assessment and internal control evaluation. It covers topics such as the auditor's responsibility regarding internal controls, separation of duties, control activities, obtaining an understanding of internal controls, control risk assessment, tests of controls, and internal control deficiencies.
(New) acc 460 acc460 final exam entire answers with questions correct 100%twiter343r
This document provides 30 multiple choice questions that appear to be from a final exam for an accounting course. The questions cover a range of topics including generally accepted accounting principles, assertions, materiality, internal controls, auditing standards, auditor responsibilities and communication.
The audit of 494 medical records found issues in billing and coding accuracy. Only 63.16% of records were accurately coded, below the target 95% accuracy rate. Financial errors resulted in $1,925 undercoding and $5,375 overcoding. Documentation was insufficient in 31 claims. Providers lacked documentation to support billed E/M levels and diagnoses. Opportunities included preventative medicine billing, E/M level documentation, and implementing coding reviews.
Este documento describe la evolución y el impacto de los automóviles a través de los años. En la posguerra, se necesitaban vehículos grandes para transportar personas y equipo. Los autos más destacados de esa época incluyeron el Morris Minor y el Chevrolet Impala. Más tarde, los automóviles mejoraron significativamente y se convirtieron también en un deporte popular. Hoy en día, sería casi imposible vivir sin autos, que juegan un rol fundamental en la vida cotidiana y han evolucionado para alcanzar mayores velocidades.
This document appears to be a payroll report for a company called Galletas Tostaditas for the month of October. It lists 17 employees including their positions, hire dates, transportation assistance, regular and overtime hours worked, hourly rates, payroll deductions and net pay. It also provides totals for extra pay, deductions, and the company's total net payroll for the month.
El resumen presenta estadísticas sobre permisos de construcción y escrituras en la Ciudad Autónoma de Buenos Aires. Se informa que los permisos otorgados y metros cuadrados construidos serán publicados de forma acumulada debido a un cambio metodológico. Asimismo, se detallan las escrituras autorizadas por escribanos de la ciudad y se indica que los precios de los inmuebles aumentaron un 10% luego de haber bajado en abril, con operaciones promedio de $409.520 en julio.
El documento habla sobre los diferentes tipos de dispositivos de almacenamiento en los sistemas informáticos. Explica que los datos se pueden almacenar internamente en la RAM o externamente en dispositivos de almacenamiento. Luego clasifica los dispositivos de almacenamiento en función del modo de acceso a los datos, y describe varios tipos comunes como las memorias ROM, RAM y auxiliares; y dispositivos magnéticos como cintas magnéticas, tambores magnéticos y discos duros. Finalmente, menciona dispositivos ó
Las retículas son herramientas que ayudan a organizar la información en páginas web, como la distribución de imágenes, texto y enlaces. Una retícula bien estructurada puede hacer que los elementos de un sitio web sean más fáciles de identificar. Las retículas visuales transmiten continuidad y permiten asociar rápidamente la distribución del contenido. Las retículas de tiempo y movimiento agregan interacción al incluir cambios y movimientos dinámicos. Las retículas cromáticas cambian de
Este documento presenta un manual para aplicar mantenimiento preventivo a periféricos como monitores, impresoras y bocinas de acuerdo con normas de seguridad e higiene. Explica los materiales y pasos necesarios para limpiar e higienizar estos dispositivos, incluyendo la eliminación de polvo, grasa y suciedad de una manera segura. El objetivo es que los alumnos aprendan a realizar este tipo de mantenimiento para prevenir fallas en el equipo.
El documento describe la evolución de los automóviles a través de diferentes etapas históricas, comenzando con vehículos capaces de transportar grandes cargas después de la guerra, luego modelos populares de la posguerra como el Mini y el Mustang, y más recientemente avances en materiales y aerodinámica que permiten mayores velocidades. Concluye que los automóviles ahora juegan un papel integral en la vida cotidiana, acortando distancias y mejorando la movilidad.
Este documento presenta un curso básico de aeromodelismo dividido en tres partes. La Parte I contiene aspectos teóricos como las definiciones de aeromodelo y aeromodelismo, las técnicas y disciplinas aplicadas, y la clasificación de aeromodelos. También explica las partes que componen un aeromodelo como el fuselaje, alas y perfil alar, y los principios de sustentación que permiten que un avión vuele. La Parte II contiene una guía para cursos escolares de aeromodelismo y
Here are the key publications from Gert Breugem's resume:
- Study Project “City edge”, Bolivia, Yearbook AvB 2003/2004, 2003
- "Amsterdam South East as a super node,” Building line, 2005
- Graduation project “Past the Green line”, Yearbook AvB, 2007/2008, 2008
Este documento describe las características de diferentes tipos de redes, incluyendo LAN, MAN, WAN e inalámbricas. También discute la importancia de Internet como una red mundial que conecta computadoras descentralizadas y ha revolucionado los negocios y transacciones.
This document describes a study on using mid-infrared absorption spectroscopy for label-free detection of phospholipid biomarkers. Phospholipids exhibit strong absorption resonances in the mid-infrared region and are detectable using this technique. The study explores separating phospholipid biomarkers using on-chip capillary electrophoresis in a PDMS microfluidic chip, and then performing label-free detection of the separated biomarkers using mid-infrared absorption spectroscopy by interrogating the biomarkers in the microfluidic channel. Initial experiments detect a phospholipid called phosphatidic acid dissolved in a non-aqueous solvent using this approach, demonstrating the feasibility of the technique for label-free phospholipid sensing.
El documento compara aspectos de la vida en Argentina en 1816, el año en que se declaró la independencia, y 2016, el bicentenario. Describe las diferencias en la edificación, costumbres, vestimenta, música, transporte y gobierno entre ambos períodos. Resalta que a pesar del paso de 200 años, algunas tradiciones como tomar mate y hacer asados los domingos se mantienen.
La escuela de formación de soldados "Vencedores del Cenepa" detalla el programa de entrenamiento de soldados y agradece la atención del público. El documento también menciona a los asistentes de instrucción que dirigen el programa de entrenamiento.
Los fenicios habitaban la estrecha franja costera entre el Líbano y el Mediterráneo y se dedicaban principalmente al comercio marítimo. Carecían de un estado unificado y estaban organizados en ciudades-estado independientes como Sidón, Tiro y Cartago. Fueron los inventores del alfabeto que evolucionó de ideogramas a símbolos fonéticos.
The document proposes a Compassionate Connected Care model to help healthcare leaders and managers strategically view data to reduce patient suffering. The model organizes care actions into four domains: clinical, operational, behavioral, and cultural. It identifies six themes that emerged from patient and provider interviews about compassionate care. The actions within each theme provide tangible ways to alleviate patient suffering across healthcare settings. The model aims to help focus improvement efforts to better meet patient needs.
El documento habla sobre la inteligencia artificial. Explica que en aproximadamente 30 años tendremos los recursos para crear inteligencia artificial y estaremos cerca de la singularidad donde desaparecen las fronteras entre la inteligencia biológica y artificial. También describe cómo la inteligencia artificial puede ser considerada una ciencia o ingeniería y cómo se han desarrollado sistemas expertos que imitan la capacidad mental humana para hacer juicios sobre problemas.
El documento proporciona instrucciones para realizar el mantenimiento de una computadora personal, incluyendo cómo retirar tornillos y placas del gabinete, instalar unidades de almacenamiento como discos duros y unidades ópticas, instalar la tarjeta madre y el procesador, y conectar cables y módulos de memoria. Explica la importancia de usar una pulsera antiestática para evitar dañar los componentes electrónicos.
El documento habla sobre el concepto de respeto. Explica que el respeto se basa en el reconocimiento mutuo y valorar los intereses de los demás. También señala que el respeto se sustenta en dos teorías éticas: el respeto por la autonomía individual y la protección de personas vulnerables. Finalmente, menciona que el respeto es una virtud moral que se encuentra entre el miedo excesivo y el abuso de los derechos de los demás.
El documento describe el uso de la simulación de robótica en la enseñanza para facilitar la comprensión de los estudiantes sobre el tema. Propone desarrollar ejercicios prácticos que conduzcan a un análisis teórico y descubrimiento continuo para lograr un aprendizaje significativo. La simulación ofrece ventajas como situaciones imposibles de recrear en el aula real y adaptación al ritmo individual del estudiante.
This document contains 6 problems from a homework chapter on auditing sampling techniques:
1. It defines statistical and nonstatistical sampling and differentiates between them.
2. It describes the difference between sampling risk and nonsampling risk.
3. It explains the difference between an attributes sampling plan and a variables sampling plan in testing inventory extensions.
4. It lists advantages of statistical sampling and decisions requiring judgment when applying statistical sampling techniques to audit testing.
5. It provides true/false statements about unrestricted random sampling without replacement.
6. It identifies definitions that match sampling terminology.
The document discusses audit evidence and procedures. It defines the components of audit risk as inherent risk, control risk, and detection risk. It explains that auditors must obtain sufficient appropriate audit evidence to reduce audit risk to a low level. The evidence should be relevant, reliable, directly obtained by the auditor when possible, and in documentary form. Audit procedures include risk assessment, tests of controls, analytical procedures, and tests of account balances, transactions and disclosures. Changing the nature, timing, or extent of procedures can alter the scope of the audit work performed.
Este documento describe la evolución y el impacto de los automóviles a través de los años. En la posguerra, se necesitaban vehículos grandes para transportar personas y equipo. Los autos más destacados de esa época incluyeron el Morris Minor y el Chevrolet Impala. Más tarde, los automóviles mejoraron significativamente y se convirtieron también en un deporte popular. Hoy en día, sería casi imposible vivir sin autos, que juegan un rol fundamental en la vida cotidiana y han evolucionado para alcanzar mayores velocidades.
This document appears to be a payroll report for a company called Galletas Tostaditas for the month of October. It lists 17 employees including their positions, hire dates, transportation assistance, regular and overtime hours worked, hourly rates, payroll deductions and net pay. It also provides totals for extra pay, deductions, and the company's total net payroll for the month.
El resumen presenta estadísticas sobre permisos de construcción y escrituras en la Ciudad Autónoma de Buenos Aires. Se informa que los permisos otorgados y metros cuadrados construidos serán publicados de forma acumulada debido a un cambio metodológico. Asimismo, se detallan las escrituras autorizadas por escribanos de la ciudad y se indica que los precios de los inmuebles aumentaron un 10% luego de haber bajado en abril, con operaciones promedio de $409.520 en julio.
El documento habla sobre los diferentes tipos de dispositivos de almacenamiento en los sistemas informáticos. Explica que los datos se pueden almacenar internamente en la RAM o externamente en dispositivos de almacenamiento. Luego clasifica los dispositivos de almacenamiento en función del modo de acceso a los datos, y describe varios tipos comunes como las memorias ROM, RAM y auxiliares; y dispositivos magnéticos como cintas magnéticas, tambores magnéticos y discos duros. Finalmente, menciona dispositivos ó
Las retículas son herramientas que ayudan a organizar la información en páginas web, como la distribución de imágenes, texto y enlaces. Una retícula bien estructurada puede hacer que los elementos de un sitio web sean más fáciles de identificar. Las retículas visuales transmiten continuidad y permiten asociar rápidamente la distribución del contenido. Las retículas de tiempo y movimiento agregan interacción al incluir cambios y movimientos dinámicos. Las retículas cromáticas cambian de
Este documento presenta un manual para aplicar mantenimiento preventivo a periféricos como monitores, impresoras y bocinas de acuerdo con normas de seguridad e higiene. Explica los materiales y pasos necesarios para limpiar e higienizar estos dispositivos, incluyendo la eliminación de polvo, grasa y suciedad de una manera segura. El objetivo es que los alumnos aprendan a realizar este tipo de mantenimiento para prevenir fallas en el equipo.
El documento describe la evolución de los automóviles a través de diferentes etapas históricas, comenzando con vehículos capaces de transportar grandes cargas después de la guerra, luego modelos populares de la posguerra como el Mini y el Mustang, y más recientemente avances en materiales y aerodinámica que permiten mayores velocidades. Concluye que los automóviles ahora juegan un papel integral en la vida cotidiana, acortando distancias y mejorando la movilidad.
Este documento presenta un curso básico de aeromodelismo dividido en tres partes. La Parte I contiene aspectos teóricos como las definiciones de aeromodelo y aeromodelismo, las técnicas y disciplinas aplicadas, y la clasificación de aeromodelos. También explica las partes que componen un aeromodelo como el fuselaje, alas y perfil alar, y los principios de sustentación que permiten que un avión vuele. La Parte II contiene una guía para cursos escolares de aeromodelismo y
Here are the key publications from Gert Breugem's resume:
- Study Project “City edge”, Bolivia, Yearbook AvB 2003/2004, 2003
- "Amsterdam South East as a super node,” Building line, 2005
- Graduation project “Past the Green line”, Yearbook AvB, 2007/2008, 2008
Este documento describe las características de diferentes tipos de redes, incluyendo LAN, MAN, WAN e inalámbricas. También discute la importancia de Internet como una red mundial que conecta computadoras descentralizadas y ha revolucionado los negocios y transacciones.
This document describes a study on using mid-infrared absorption spectroscopy for label-free detection of phospholipid biomarkers. Phospholipids exhibit strong absorption resonances in the mid-infrared region and are detectable using this technique. The study explores separating phospholipid biomarkers using on-chip capillary electrophoresis in a PDMS microfluidic chip, and then performing label-free detection of the separated biomarkers using mid-infrared absorption spectroscopy by interrogating the biomarkers in the microfluidic channel. Initial experiments detect a phospholipid called phosphatidic acid dissolved in a non-aqueous solvent using this approach, demonstrating the feasibility of the technique for label-free phospholipid sensing.
El documento compara aspectos de la vida en Argentina en 1816, el año en que se declaró la independencia, y 2016, el bicentenario. Describe las diferencias en la edificación, costumbres, vestimenta, música, transporte y gobierno entre ambos períodos. Resalta que a pesar del paso de 200 años, algunas tradiciones como tomar mate y hacer asados los domingos se mantienen.
La escuela de formación de soldados "Vencedores del Cenepa" detalla el programa de entrenamiento de soldados y agradece la atención del público. El documento también menciona a los asistentes de instrucción que dirigen el programa de entrenamiento.
Los fenicios habitaban la estrecha franja costera entre el Líbano y el Mediterráneo y se dedicaban principalmente al comercio marítimo. Carecían de un estado unificado y estaban organizados en ciudades-estado independientes como Sidón, Tiro y Cartago. Fueron los inventores del alfabeto que evolucionó de ideogramas a símbolos fonéticos.
The document proposes a Compassionate Connected Care model to help healthcare leaders and managers strategically view data to reduce patient suffering. The model organizes care actions into four domains: clinical, operational, behavioral, and cultural. It identifies six themes that emerged from patient and provider interviews about compassionate care. The actions within each theme provide tangible ways to alleviate patient suffering across healthcare settings. The model aims to help focus improvement efforts to better meet patient needs.
El documento habla sobre la inteligencia artificial. Explica que en aproximadamente 30 años tendremos los recursos para crear inteligencia artificial y estaremos cerca de la singularidad donde desaparecen las fronteras entre la inteligencia biológica y artificial. También describe cómo la inteligencia artificial puede ser considerada una ciencia o ingeniería y cómo se han desarrollado sistemas expertos que imitan la capacidad mental humana para hacer juicios sobre problemas.
El documento proporciona instrucciones para realizar el mantenimiento de una computadora personal, incluyendo cómo retirar tornillos y placas del gabinete, instalar unidades de almacenamiento como discos duros y unidades ópticas, instalar la tarjeta madre y el procesador, y conectar cables y módulos de memoria. Explica la importancia de usar una pulsera antiestática para evitar dañar los componentes electrónicos.
El documento habla sobre el concepto de respeto. Explica que el respeto se basa en el reconocimiento mutuo y valorar los intereses de los demás. También señala que el respeto se sustenta en dos teorías éticas: el respeto por la autonomía individual y la protección de personas vulnerables. Finalmente, menciona que el respeto es una virtud moral que se encuentra entre el miedo excesivo y el abuso de los derechos de los demás.
El documento describe el uso de la simulación de robótica en la enseñanza para facilitar la comprensión de los estudiantes sobre el tema. Propone desarrollar ejercicios prácticos que conduzcan a un análisis teórico y descubrimiento continuo para lograr un aprendizaje significativo. La simulación ofrece ventajas como situaciones imposibles de recrear en el aula real y adaptación al ritmo individual del estudiante.
This document contains 6 problems from a homework chapter on auditing sampling techniques:
1. It defines statistical and nonstatistical sampling and differentiates between them.
2. It describes the difference between sampling risk and nonsampling risk.
3. It explains the difference between an attributes sampling plan and a variables sampling plan in testing inventory extensions.
4. It lists advantages of statistical sampling and decisions requiring judgment when applying statistical sampling techniques to audit testing.
5. It provides true/false statements about unrestricted random sampling without replacement.
6. It identifies definitions that match sampling terminology.
The document discusses audit evidence and procedures. It defines the components of audit risk as inherent risk, control risk, and detection risk. It explains that auditors must obtain sufficient appropriate audit evidence to reduce audit risk to a low level. The evidence should be relevant, reliable, directly obtained by the auditor when possible, and in documentary form. Audit procedures include risk assessment, tests of controls, analytical procedures, and tests of account balances, transactions and disclosures. Changing the nature, timing, or extent of procedures can alter the scope of the audit work performed.
AUDITING AND ATTESTATION PROBLEMS AND SOLUTIONS.pdfCynthia Velynne
The document provides information about the Auditing and Attestation Exam, including:
- The exam is scheduled for four and a half hours and will include multiple choice testlets and simulations.
- The exam covers six modules: engagement planning, internal control, evidence, reporting, audit sampling, and auditing with technology.
- Each module provides the allocation of time, number and types of problems, and page numbers for the problems and answers.
You are the audit manager on the Pollyanna Ltd audit engagement and ha.pdfsravi07
You are the audit manager on the Pollyanna Ltd audit engagement and had agreed with the junior
associate that audit sampling would be used in testing the Accounts Receivable balance. During
your review of the junior associate's audit documentation around the work done on the Accounts
Receivable (AR) balance, you came across the following: i. There was a misstatement between
the balance confirmed by a debtor and the amount noted in the client's AR subledger, which the
associate did not recognise ii. In testing the completeness of the AR balance, the associate
selected a sample of balances from the AR subledger and traced them to the invoices supporting
the balance iii. In selecting the sample of balances to send confirmations for, the associate
targeted AR balances she believed would be more likely to respond to the confirmation request
iv. The audit manager had advised the associate that controls risk assessment around AR had
increased from the team's preliminary assessment, however the associate had not changed the
extent of items selected for testing. Required a) For each of the above state whether it represents
sampling risk or non-sampling risk? (4 marks) b) State how both sampling risk and non-sampling
risk can be reduced. (2 marks).
Additional note on Audit sampling Draw final conclusionsztariku
The purpose of audit sampling is to draw inferences about the entire population
(the reported inventory account balance in the example above) from the results
of a sample. Using just the information provided above, what is your best estimate of the misstatement in the inventory account balance? In Chapter 8 our best
estimate of the population deviation rate for control testing was the sample deviation rate. Similarly, when using audit sampling to test account balances, we will
want to project the misstatement observed in the sample to the population. In the
example above, the observed misstatement could be projected to the population
by computing the ratio of misstatement to the total dollars sampled: 2 percent
($2,000 $100,000). Applying this ratio to the entire account balance produces a
best estimate or projected misstatement in the inventory account of $60,000 (2%
$3,000,000). If your best estimate is that the account is overstated by $60,000,
do you believe the account is fairly stated? The answer to this question, like
many questions in auditing is, “it depends.” It depends in part on the amount
of misstatement that can be tolerated for the inventory account. If the amount
of misstatement that can be tolerated for this account is $50,000, then we
cannot conclude that the account is fairly stated because our best estimate (or
projected misstatement) is higher than the amount we can tolerate. What if tolerable misstatement was $110,000; would you conclude that the account is fairly
stated? The answer is again, “it depends.” Whenever sampling is used, the evaluation must include an allowance for sampling risk. When sampling is used to
estimate monetary misstatement, an upper and lower confidence bound or misstatement limit must be established as an allowance for sampling risk. In the
above example, the misstatement in the population could be $60,000, but it also
might be higher or lower because the estimate is based on a sample. If tolerable
misstatement is $110,000, and the upper limit on the account’s possible misstatement is less than $110,000, then the account is considered fairly stated. The size
of the upper limit on misstatement is largely dependent on the sample size, which
is also directly related to the desired confidence level. You may remember from your statistics courses using concepts such as
“standard deviation” and a “normal distribution” (i.e., Z scores or confidence
coefficients) to compute confidence limits and intervals. This traditional statistical
approach is used for classical variables sampling, which is covered in the
Advanced Module. Before personal computers were commonly available, themathematical complexity of classical variable sampling was problematic for
auditors. In response, auditors developed an audit sampling approach for testing
balances called monetary-unit sampling. Monetary-unit sampling is based on
attribute-sampling concepts. While the computations involved in classical variables sampling can now
This document discusses materiality and risk in auditing. It covers key concepts such as:
- Materiality refers to whether financial statement misstatements could influence users' decisions. The auditor determines a preliminary materiality level and allocates it to accounts.
- Audit risk is the risk that the auditor gives an unqualified opinion when statements are materially misstated. It depends on inherent, control, and detection risks. Higher inherent or control risks require lower detection risk.
- Inherent risk comes from the nature of accounts and transactions. Higher risk accounts require more evidence. Control risk refers to the risk of internal controls not preventing misstatements.
7. Plan, perform, and evaluate samples for substantive procedures IPPTChap009...55296
This document discusses audit sampling techniques for substantive tests of account balances, specifically monetary unit sampling (MUS). It outlines the steps in applying MUS, including: 1) planning by defining the population, sampling unit, and misstatements, 2) determining sample size based on desired confidence level, tolerable misstatement, expected population misstatement, and population size, 3) selecting the sample, 4) performing audit procedures on the sample, 5) calculating the projected misstatement and upper limit, and 6) drawing conclusions by comparing the upper limit to the tolerable misstatement. An example application of MUS to test accounts receivable is provided to illustrate these steps.
The document discusses the overall audit plan and audit program. It covers:
1) Applying audit testing including tests of controls, testing for monetary misstatements, and reducing audit risk.
2) Designing the audit program including tests of controls, substantive tests of transactions, analytical procedures, and tests of details of balances.
3) Selecting appropriate audit tests considering the cost of testing, appropriate evidence needed, and how risk affects testing.
The document discusses the concepts of materiality and risk in auditing. It covers how materiality is used to determine the appropriate audit report and evaluate misstatements. The audit risk model components of inherent risk, control risk, and detection risk are explained along with how they impact evidence planning. Factors that influence the assessment of risks are also outlined.
The document discusses various concepts related to auditing, including control risk, inherent risk, detection risk, internal controls, substantive tests, and revenue recognition. It provides definitions and examples for these terms. For instance, it defines control risk as the risk that a misstatement will not be prevented or detected by internal controls. It also gives examples of improper revenue recognition schemes and discusses testing controls related to the revenue cycle.
This document discusses designing substantive audit procedures. It covers determining detection risk based on inherent and control risk, and how the nature, timing, and extent of substantive procedures varies with detection risk. The document describes analytical procedures, tests of details of transactions, and tests of details of balances as types of substantive procedures. It also discusses developing audit programs, computer-assisted techniques, and special considerations like estimates and related parties.
1 ACCT 422 – Auditing Theory and Practice Final.docxjoyjonna282
1
ACCT 422 – Auditing Theory and Practice
Final Exam
Due: 4 hours after Private Message containing exam is opened and no
later than Sunday, March 9, 2014 at 11:00 p.m. EST
Instructions: You have four (4) hours to complete and submit this final exam in your
assignment folder. This is an open book, open notes exam. This final exam consists of 3
parts. Your answers to the exam should be submitted on a separate answer sheet. Your
answer sheet should be submitted as an attachment in your assignment folder under the
“Final” folder in Microsoft Word, WordPerfect or PDF format. Please write your name
on your answer sheet. Please do not write your answers directly in the narrative portion
of your assignment folder.
Part 1: Multiple Choice questions – (worth total of 75 points)
For Part 1, please number your answer sheet from 1 to 40 and provide the letter corresponding to
the best answer (eg, 1. A, 2. B, etc.).
1.
Insurance expense for the period is a function of which of the following?
A. The beginning prepaid balance, current premium payments and the ending prepaid
balance.
B. The beginning prepaid balance and the current period premium payments.
C. The current period premium payments.
D. The current period premium payments and the ending prepaid balance.
2.
A significant customer of the firm suffers a large economic loss after year end, but
prior to completion of field work. The audit client believes this event will have material
effect on the financial statements. The auditor should:
A. adjust the financial statements for the year under audit.
B. add a paragraph to the audit report.
C. advise the client to disclose the event in the notes to the financial statements.
D. advise the client to delay issuing the financial statements until the economic loss
can be determined.
3.
Which of the following statements is true?
A. There is an inverse relationship between the interest and dividends accounts and
debt and equity.
B. There is no relationship between the interest and dividends accounts and debt and
equity.
C. There is a direct relationship between the interest and dividends accounts and debt
and equity.
D. None of the above is true.
2
4.
The process of transferring money from one bank account to another and improperly
recording the transaction is referred to as:
A. kiting.
B. lapping.
C. scamming.
D. embezzling.
5.
Which of the following is least likely to uncover fraud?
A. External auditors
B. Internal auditors
C. Internal controls
D. Management
6.
Which of the following is not correct regarding an auditor's decision that a lower
acceptable audit risk is appropriate?
A. More evidence is accumulated.
B. Less evidence is accumulated.
C. Special care is required in assigning experienced staff.
D. Review of audi ...
Week 5 Homework QuestionsQuestions 1 and 2 were taken directly f.docxco4spmeley
Week 5 Homework Questions
Questions 1 and 2 were taken directly from the text and I am aware that the answers are available through an internet search.
I want to remind you that searching the internet for the answers and using those answers is a violation of UMUC academic integrity policies.
In addition, using any outside source without citation is plagiarism.
However, just gaining access to the answers will not satisfy the homework assignment because I have added the requirement that you explain your answers, which cannot be found on the internet and needs to be reasoned out from the material in the chapter.
In grading, I will place more emphasis you explanation than your selection of the correct alternative.
1)
The following are several multiple choice questions adapted from the CPA exam that cover the concept and application of materiality.
For each question, selected the best answer and then explain why it is better than all the alternatives.
Your explanations should address all the possible alternatives presented in the question.
a)
Which one of the following statements is correct concerning the concept of materiality?
i)
Materiality is determined by reference to guidelines established by the AICPA.
ii)
Materiality depends only on the dollar amount of an item relative to other items in the financial statements.
iii)
Materiality depends on the nature of an item rather than the dollar amount.
iv)
Materiality is a matter of professional judgment.
Answer:
Explanation
:
b)
In considering materiality for planning purposes, an auditor believes that misstatements aggregating $10,000 will have a material effect on an entity's income statement, but that misstatements will have to aggregate $20,000 to materially affect the balance sheet.
Ordinarily, it is appropriate to design audit procedures that are expected to detect misstatements that aggregate to
i)
$10,000
ii)
$15,000
iii)
$20,000
iv)
$30,000
Answer:
Explanation
:
c)
A client decides not to record an auditor's proposed adjustments that collectively are not material and wants the auditor to issue the report based on the unadjusted numbers.
Which of the following statements is correct regarding the financial statement presentation?
i)
The financial statements are free from material misstatement, and no disclosure is required in the notes to the financial statements.
ii)
The financial statements do not conform with generally accepted accounting principles (GAAP).
iii)
The financial statements contain unadjusted misstatements that should result in a qualified opinion.
iv)
The financial statements are free from material misstatement, but disclosure of the proposed adjustment is required in the notes to the financial statements.
Answer:
Explanation
:
2)
The following are several multiple choice questions adapted from the CPA exam that cover audit risk.
For each question, selected the best answer and then explain why it is better than all the alternative.
The document outlines the audit process from start to finish. It begins with pre-engagement activities like client evaluation and drafting an engagement letter. Next is planning which involves identifying risks, linking them to accounts, and determining the audit strategy. Testing then occurs, including internal controls, accounts, and conclusions. The audit results in an opinion on whether the financial statements fairly represent the entity's position and an optional management letter with other observations. The document provides examples at each step to demonstrate the audit process.
Auditing & Assurance Standard 15 provides guidance on audit sampling for auditors. It establishes that auditors can use statistical or non-statistical sampling methods to evaluate a sample of items from a population to obtain sufficient audit evidence rather than examining all items. The standard provides guidance on designing an audit sample, including considering the audit objectives, population, stratification, sample size, tolerable error, and sampling risk. It also provides guidance on selecting the sample randomly, systematically, or haphazardly and evaluating the results.
This document outlines the key concepts and steps for audit sampling, including defining representative samples, statistical vs nonstatistical sampling, probabilistic vs nonprobabilistic selection methods, important sampling terms, and the 14 steps to planning, selecting, and evaluating audit samples. Statistical sampling uses mathematical rules and probabilistic selection to quantify sampling risk, while nonstatistical sampling relies on judgment and nonprobabilistic selection. The goal is to obtain samples that accurately represent the full population.
TEST BANK For Auditing & Assurance Services A Systematic Approach, 11th Editi...Donc Test
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The document provides the solutions to ACC 492 Final Exam questions. It begins with identifying the link to download the full exam solutions and contact information. It then lists 30 multiple choice questions from the exam along with the corresponding answers. The questions cover topics like internal controls, audit objectives, audit procedures, subsequent events, professional ethics, and auditor liability.
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