An internal check is an arrangement of duties of the staff members in such a way that the work performed by one person is automatically and independently checked by the other staff; the salesman negotiates with a client across the counter, the cashier receives cash, an accounts clerk transfers the transaction to the journal… an so on.
Objective of today’s session:
What is a Fixed Asset ?
Objective of Audit
Documents to be obtained from client
Process of verification
-Acquisitions
-Disposals
-Depreciation/Amortization
-Disclosure requirements
Major differences between old AS 10,AS 6 and New AS 10
Objective of today’s session:
Purchasing system and procedure.
Audit objective.
Audit procedure.
Audit program.
Cash purchases.
Audit findings and reporting.
An internal check is an arrangement of duties of the staff members in such a way that the work performed by one person is automatically and independently checked by the other staff; the salesman negotiates with a client across the counter, the cashier receives cash, an accounts clerk transfers the transaction to the journal… an so on.
Objective of today’s session:
What is a Fixed Asset ?
Objective of Audit
Documents to be obtained from client
Process of verification
-Acquisitions
-Disposals
-Depreciation/Amortization
-Disclosure requirements
Major differences between old AS 10,AS 6 and New AS 10
Objective of today’s session:
Purchasing system and procedure.
Audit objective.
Audit procedure.
Audit program.
Cash purchases.
Audit findings and reporting.
ACC 492 NEW Effective Communication/tutorialrank.comjonhson247
For more course tutorials visit
www.tutorialrank.com
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
Acc 492 new Social Responsibility / tutorialrank.comPrescottLunt432
For more course tutorials visit
www.tutorialrank.com
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)
For more course tutorials visit
www.newtonhelp.com
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
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)
1
WEEK 2 TEAM ASSIGNMENT
Week 2 Team Assignment
Learning Team B
ACC/492
7/24/16
Introduction
AUDIT PROGRAM FOR CASH
Risks
· Cash transactions may not be documented correctly
· Does cash exist
· Fraud
Steps
1. Discuss and document the routine for receiving and disbursing cash.
a) Sources of cash
b) Frequency of bank deposits
c) The person making the deposit
d) The various levels of cash received, is it appropriate
e) Documentation of expenditures (check requests, agreements, invoices…)
f) The approval process
2. Confirm selected bank accounts and special activities
For the petty cash funds (Is the petty cash voucher maintained properly?)
Are physical cash counts:
a) Conducted regularly by a person or people who are not direct guardians of the petty cash funds?
b) Reconciled with the petty cash voucher?
c) Documented the counts and reconciled against the petty cash voucher?
d) Are the petty cash funds restricted to only authorized personnel? Who has contact to funds?
For all checking accounts
a) Identify how many signatures are mandatory on each check.
b) Identify the process by which cash is received and how often.
c) Acquire bank statements for each bank account.
d) Identify the frequency and timing of the bank reconciliations. Who is responsible for the reconciliations?
e) Acquire bank reconciliations and test for accuracy.
f) Affirm if an additional person reviews bank reconciliations on a regular monthly basis. The review document should include the date of examination and a signature of the second person reviewing the bank reconciliation.
3. Test bank reconciliations
Choose bank accounts for confirmation in order to obtain a moderate to low level of assurance that the above mentioned audit purposes are achieved.
a) Test the mathematical accuracy of bank reconciliations
b) Trail-back to the book balances on the client’s bank reconciliation to the summary.
c) Trail-back to the balances on the client’s bank reconciliation to the bank statement.
d) Test reconciling items on the bank reconciliation by performing the following:
i) acquire previous month bank statement and supporting documents
ii) trace outstanding items listed on the bank reconciliation.
iii) trace deposits in transit listed on the bank reconciliation.
iv) get explanation of big, uncommon reconciling items and trace to supporting documents.
v) investigate any other unusual items.
Confirmation requests should be sent under our control and, second requests and, where warranted, third requests should be mailed when responses to confirmation requests have not been received within a reasonable time.
Consider sending a special inquiry letter to ascertain the existence of special arrangements or restrictions, for example, compensating balance arrangements, security arrangements, written guarantees.
4. Review confirmations received
For confirmations received:
a) compare account information and account balance to matching summary.
...
Select the necessary words from the list of possibil.docxedgar6wallace88877
Select the necessary words from the list of possibilities to complete the following statements.
cost or market balance sheet planning confirmed
test counts pricing purchase orders receiving document
existence obsolescence
1. To help ensure that the physical inventory is taken accurately and completely, early in the audit the auditors should participate in the ___________________ of the count of physical inventory.
2. The auditors observe the inventory taking primarily to obtain evidence of the ________________________ assertion and to a certain extent the client's rights to the inventories.
3. The details of the auditors’ ____________________ made during the observation of the physical inventory should be recorded in their working papers to later check the accuracy of the final inventory listing.
4. Inventories stored in public warehouses should be __________________ with the custodians.
5. The auditors' review of purchase invoices is generally performed in connection with tests of the ____________________ of the inventories.
6. As a general rule, inventories are carried at the lower of ________________________.
7. Tracing ____________________ for several days before and after year-end to recorded purchases is designed to test the proper cutoff of purchase transactions.
8. A decreasing rate of inventory turnover suggests the possibility of inventory _______________________.
9. Even though the auditors are unable to obtain evidence regarding the fairness of beginning inventories, they may still issue an unmodified opinion on the client's ______________________________ .
10. Serially numbered ___________________________ should be prepared and sent to vendors when goods are ordered
For questions 11-25, circle the best answer.
11. A client erroneously recorded a large purchase twice. Which of the following internal control measures would be most likely to detect this error in a timely and efficient manner?
a. Footing the purchases journal.
b. Reconciling vendors’ monthly statements with subsidiary payable ledger accounts.
c. Tracing totals from the purchases journal to the ledger accounts.
d. Sending written quarterly confirmation to all vendors.
12. For effective internal control, the accounts payable department should compare the information on each vendor’s invoice with the:
a. Receiving report and the purchase order.
b. Receiving report and the voucher.
c. Vendor’s packing slip and the purchase order.
d. Vendor’s packing slip and the voucher.
13. In an audit, the valuation of year-end accounts payable is most likely addressed by:
a. Confirmation.
b. Examination of cash disbursements immediately prior to year-end.
c. Examination of cash disbursements immediately subsequent to year-end.
d. Analytical procedures applied to vouchers payable at year-end.
14. Ordinarily, the most significant assertion relating to accounts payable is:
a. Completeness.
b. Existence.
c. Presentation.
d. Valuation.
15. To determine that.
Unit 7 AssignmentSearch using individual internet research and c.docxmarilucorr
Unit 7 Assignment
Search using individual internet research and complete an essay (in at least 400 words), that investigates a cultural group in your desired field (Business). Describe what the Business feild is like in your own words with support from any outside source information you have found. Be sure to cite and reference in APA format any outside sources you have used.
Directions: Please use the headings below (other than the introduction heading) to create your paper. This paper should address each of the following topics about the profession you want to work in after you graduate. Under each heading are specific areas that you can address in that section. Please do not leave the italicized notes below in your paper.
Introduction
Include an introduction to the paper
Language and Behaviors
Language would focus on these elements in terms of an industry culture. For example, is there a special vocabulary or terminology used for the profession?
Behaviors – For example, what type of demeanor is expected? Are there body language expectations?
Attitudes and Beliefs
What are the main ethics rules of the profession?
What beliefs does the profession focus on as a whole?
Values and Interest
What are the core values of the profession? How does this support the attitudes and beliefs of the profession?
Education and Trainings
What types of trainings or certifications are needed to continue in the profession?
Are you required to have a specific level of college degree?
Do you need to renew a license or certification every several years?
Tools and Equipment used
What types of tools and/or equipment are required for the job?
Do you need training to use these?
Interactions with others
Who are others that you will work with in the field? What types of interactions will you have?
Conclusion
Wrap- up the main ideas in the paper
QUIZ #2 – ACCT 422‐ Auditing – SPRING 2017
There are 26 questions on this Quiz. Please attempt all questions. Record your answers on a
separate sheet(s) and submit the file into your Assignment folder for Quiz #2.
The following questions concern persuasiveness of evidence. Choose the best response.
1. Which of the following types of documentary evidence should the auditor consider to be the most
reliable?
a. A sales invoice issued by the client and supported by a delivery receipt from an outside
trucker.
b. Confirmation of an account payable balance mailed by and returned directly to the auditor.
c. A check, issued by the company and bearing the payee’s endorsement, that is included with
the bank statements mailed directly to the auditor.
d. An audit schedule prepared by the client’s controller and reviewed by the client’s treasurer.
2. The most reliable type of audit evidence that an auditor can obtain is
a. Physical examination by the auditor.
b. Calculations by the auditor from company ...
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 ...
CHAPTER 1 This list below indicated various audits, attestation,.docxzebadiahsummers
CHAPTER 1: This list below indicated various audits, attestation, and other engagements involving auditors.
1. A report on the effectiveness of internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act.
2. An auditor’s report on whether the financial statements are fairly presented in accordance with International Financial Reporting Standards.
3. An engagement to help a company structure a merger transaction to minimize the taxes of the combined entities.
4. A report stating whether the company has complied with restrictive covenants related to officer compensation and payment of dividends contained in a bank loan agreement.
5. A report on the effectiveness of internal controls at a company that provides payroll processing for other companies.
6. An examination report stating whether a company’s statement of greenhouse gas emissions is presented in conformity with standards issued by the World Business Council for Sustainable Development and the World Resources Institute.
7. Evaluating the voting process and certifying the outcome for Rolling Stones Magazine’s “Greatest Singer of All Time” poll.
8. A report indicating whether a governmental entity has compiled with certain government regulations.
9. A review report that provides limited assurance about whether financial statements are fairly stated in accordance with U.S. GAAP.
10. A report about management’s assertion on the effectiveness of controls over the availability, reliability, integrity, and maintainability of its accounting information system.
11. An evaluation of the effectiveness of key measures used to assess an entity’s success in achieving specific targets linked to an entity’s strategic plan and vision.
Required
a. Explain the relationships among audit services, attestation services, and other assurance and no assurance services provided by CPA’s.
b. For each of the services listed above, indicate the type of service from the list that follows.
(1) An audit of historical financial statements.
(2) An attestation service other than an audit service.
(3) An assurance or no assurance service that is not an attestation service.
1-21. Dave Czarnecki is the managing partner of Czarnecki and Hogan, a medium-sized local CPA firm located outside of Chicago. Over lunch, he is surprised when his friend James Foley asks, him, “Doesn’t it bother you that your clients don’t look forward to seeing their auditors each year?” Dave responds, “Well auditing is only one of several services we provide. Most of our work for clients does not involve financial statement audits, and our audit clients seem to like interacting with us.”
a. Identify ways in which a financial statement audit adds value for clients.
b. List other services other than audits that Czarnecki and Hogan likely provides.
c. Assume Czarnecki and Hogan has hired you as a consultant to identify ways in which they can expand their practice. Identify at least one additional service that .
Question 1 The first general standard of the PCAOB requires th.docxIRESH3
Question 1
The first general standard of the PCAOB requires that an audit be performed by which type of person?
Answer
An auditor with seasoned judgment in varying degrees of supervision and review.
An auditor with appropriate technical training and proficiency.
An auditor with adequate knowledge of the standards of field work and reporting.
An auditor satisfying the independence standards
Question 2
Which assertion addresses whether all transactions and accounts that should be included in the financial statements are included?
Answer
Existence.
Valuation.
Completeness.
Rights and Obligations
Question 3
Which one of the following attributes is not required of an auditor?
Answer
Independence.
Bias.
Integrity.
Technical competence
Question 4
Which one of the following is a reporting standard requirement?
Answer
The auditor will state explicitly whether the financial statements are fairly presented in accordance with the applicable financial reporting framework.
The auditor will identify in the auditor’s report, those circumstances in which auditing principles have not been consistently observed in the current period in comparison to the preceding period.
The auditor will review adjusting journal entries for accuracy, and if the auditor concludes those entries are not reasonable accurate, the auditor must so state in the auditor’s report.
The auditor will express an unqualified opinion on the financial statements, or will conduct additional audit procedures until such an opinion can be expressed
Question 5
When obtaining an understanding of internal controls, what is the independent external auditor primary concerned with?
Answer
Detecting all errors.
Determining the effectiveness of operations.
Determining whether the internal controls can be relied upon.
Determining whether the controls promote efficiency
Question 6
Which of the following is an inherent limitation of internal controls?
Answer
Lack of auditor independence.
Collusion.
Separation of duties.
Employee peer review.
Question 7
Which of the following is clearly a test of controls?
Answer
Walk-through of the expense cycle from performance of the service to the reporting in the balance sheet.
Examination of a sample of purchase order records for electronic, authenticated, authorization.
Observing the controller's use of company owned equipment.
Sending a letter to the client's attorney to determine litigation that is pending between plaintiff and the defendant
Question 8
Which of the following is an example of a detective control in an information system?
Answer
Automated reports to management that specifically identify delinquent receivable.
A requirement that salaried employees submit written requests to work overtime.
Assurance from top management that computer centers are kept locked.
The employment of trustworthy people to enter data into the information system
Question 9
Which of foll ...
Similar to ACC 492 (Contemporary Auditing II - entirecourse.com) (20)
Question 1 The first general standard of the PCAOB requires th.docx
ACC 492 (Contemporary Auditing II - entirecourse.com)
1. ACC 492 Week 1 DQ 1
Describe the revenue or payroll cycle at your organization? What source documentation is used in the
revenue and payroll cycles at your organization?
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-1-DQ-1
ACC 492 Week 1 DQ 2
What internal controls components are commonly found among the revenue and payroll cycles? What
components are unique to each cycle?
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-1-DQ-2
ACC 492 Week 1 Individual Assignment from the Text
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-1-Individual-
Assignment
ACC 492 Week 1 Individual Multiple Choice
1. Which of the following accounts in a merchandising company is affected by both the revenue cycle
and another cycle?
a. sales
b. sales returns and allowances
c. inventory
d. accounts receivable
e. accounts payable
2. The audit objective, “The accounts receivable balance represents gross claims on customers and
agrees with the sum of the accounts receivable subsidiary ledger” is derived from the assertion of:
a. existence or occurrence
b. completeness
c. rights and obligations
d. valuation or allocation
e. presentation or disclosure
3. All sales, cash receipts, and sales adjustments are accurately valued using GAAP and correctly
journalized, summarized and posted are transaction objectives for:
a. occurrence
b. completeness
c. accuracy
d. cutoff
e. classification
4. Disclosure objectives includes all of the following except:
a. occurrence and rights and obligations
b. cutoff
c. completeness
d. classification and understandability
e. accuracy and valuation
5. The bonding of employees will normally be expected to:
a. “weed out” dishonest employees already hired
b. eliminate the need for separation of duties in the cash receipts area
c. guarantee that all employee fraud will be prevented
d. provide reasonable assurance that all employees will perform their jobs with the utmost integrity
e. serve as a deterrent to dishonesty
6. A company policy states that annual vacations are mandatory for all employees. This policy is most
2. important for employees who:
a. are not bonded
b. handle cash receipts
c. maintain the detailed accounting records
d. have access to the general ledger
e. serve as inventory clerks
7. A company has a policy of rotating employees’ assigned duties. This policy is most important for
employees who:
a. are not bonded
b. maintain the detailed accounting records
c. handle cash receipts
d. have access to the general ledger
e. serve as inventory clerks
8. Auditors should evaluate new controls associated with all of the following except:
a. new product lines
b. new sources of revenues
c. management’s response to new accounting standards for revenue transactions
d. related changes in personnel
e. all of the above
9. An understanding of the revenue accounting system requires knowledge of all of the following
except:
a. how sales are initiated
b. how goods and services are delivered
c. how payables are recorded
d. how cash is received
e. how sales adjustments are made
10. In a credit-merchandising environment, which of the following documents usually initiates the
activity in the sales cycle?
a. shipping document
b. customer order
c. material requisition
d. sales invoice
e. sales order
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-1-Individual-
Multiple-Choice
ACC 492 Week 1 Quiz
1. In an accrual accounting system, revenues are recognized as goods are delivered or as services are
rendered.
2. Give a brief definition of revenue.
3. How are revenues measured?
4. List any three types of transactions normally processed by the revenue process.
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-1-Quiz
ACC 492 Week 2 DQ 1
How might a purchasing manager use his/her position to defraud the company? What can be done to
prevent it? Where could an auditor look to find evidence of losses on purchase commitments and
unrecorded liabilities to vendors?
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-2-DQ-1
3. ACC 492 Week 2 DQ 2
Why does an auditor examine travel and entertainment expenses? What would poor controls regarding
executive reimbursements say about the “tone at the top” for purposes of evaluating and reporting on
internal controls?
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-2-DQ-2
ACC 492 Week 2 Individual Assignment from the Text
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-2-Individual-
Assignment-from-the-Text
ACC 492 Week 2 Individual Multiple Choice
1. Which of the following accounts does not appear in the acquisition and expenditure cycle?
a. Cash.
b. Purchases Returns.
c. Sales Returns.
d. Prepaid Insurance.
2. For which of the following accounts would the matching concept be the most
appropriate?
a. Cost of Goods Sold.
b. Research and Development.
c. Depreciation Expense.
d. Sales.
3. Which of the following would not overstate current period net income?
a. Capitalizing an expenditure that should be expensed.
b. Failing to record a liability for an expenditure.
c. Failing to record a check paying an item in Vouchers Payable.
d. All of the above would overstate net income.
4. A client’s purchasing system ends with the recording of a liability and its eventual payment. Which
of the following best describes the auditor’s primary concern with respect to liabilities resulting from
the purchasing system?
a. Accounts payable are not materially understated.
b. Authority to incur liabilities is restricted to one designated person.
c. Acquisition of materials is not made from one vendor or one group of vendors.
d. Commitments for all purchases are made only after established competitive bidding
procedures are followed.
5. Which of the following is an internal control activity that could prevent a paid disbursement voucher
from being presented for payment a second time?
a. Vouchers should be prepared by individuals who are responsible for signing disbursement
checks.
b. Disbursement vouchers should be approved by at least two responsible management
officials.
c. The date on a disbursement voucher should be within a few days of the date the voucher
is presented for payment.
d. The official who signs the check should compare the check with the voucher and should
stamp “PAID” on the voucher documents.
6. Budd, the purchasing agent of Lake Hardware Wholesalers, has a relative who owns a retail
hardware store. Budd arranged for hardware to be delivered by manufacturers to the retail store on a
COD basis, thereby enabling his relative to buy at Lake’s wholesale prices. Budd was probably able to
4. accomplish this because of Lake’s poor internal control over:
a. Purchase requisitions.
b. Cash receipts.
c. Perpetual inventory records.
d. Purchase orders.
7. Which of the following is the best audit procedure for determining the existence of unrecorded
liabilities?
a. Examine confirmation requests returned by creditors whose accounts appear on a
subsidiary trial balance of accounts payable.
b. Examine a sample of cash disbursements in the period subsequent to year-end.
c. Examine a sample of invoices a few days prior to and subsequent to the year-end to
ascertain whether they have been properly recorded.
d. Examine unusual relationships between monthly accounts payable and recorded
purchases.
8. Which of the following procedures is least likely to be performed before the balance sheet date?
a. Observation of inventory.
b. Review of internal control over cash disbursements.
c. Search for unrecorded liabilities.
d. Confirmation of receivables.
9. To determine whether accounts payable are complete, an auditor performs a test to verify that all
merchandise received has been recorded. The population for this test consists of all
a. Vendors’ invoices.
b. Purchase orders.
c. Receiving reports.
d. Canceled checks.
(AICPA adapted)
10. When verifying debits to the perpetual inventory records of a nonmanufacturing company, an
auditor would be most interested in examining a sample of purchase
a. Approvals.
b. Requisitions.
c. Invoices.
d. Orders.
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-2-Individual-
Multiple-Choice
ACC 492 Week 2 Quiz
1. Expenses are normally accrued at the end of the accounting period by a small business that follows
the cash method of accounting.
2. List two expense accounts that are usually accrued at the end of an accounting period.
3. Name the document that is usually completed before a purchase order is executed.
4. Which assertion is of primary importance to the auditor in auditing accounts payable? Why?
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-2-Quiz
ACC 492 Week 2 Team Assignment Internal Control Questionnaire
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-2-Team-
Assignment-Internal-Control-Questionnaire
ACC 492 Week 3 DQ 1
Identify three analytical procedures that an auditor might perform with respect to plant assets and
5. explain how they might assist in identifying potential misstatements.
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-3-DQ-1
ACC 492 Week 3 DQ 2
What is the fraud known as kiting, and how can the auditor detect it? What is the fraud known as
lapping, and how can the auditor detect it?
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-3-DQ-2
ACC 492 Week 3 Individual Multiple Choice Quiz
1. Which of the following approaches is most suitable for auditing the finance and investment cycle?
a. Perform extensive tests of controls and limit substantive procedures to analytical procedures.
b. Ignore internal controls and perform extensive substantive procedures.
c. Review internal controls, and perform extensive substantive procedures.
d. Ignore internal controls and limit substantive procedures to analytical procedures.
2. Loan covenants are used for which of the following reasons?
a. To protect the lender from the borrower substantially weakening the borrower’s financial position.
b. To protect the borrower from the lender calling the loan early.
c. To protect the auditor from false information by the borrower.
d. To protect shareholders from management taking on too much debt.
3. A related-party is a person or entity that
a. Has a family tie to a management member.
b. Does business with the company.
c. Can exert significant influence over or be influenced by the company.
d. Is a member of the company’s management.
4. Jones was engaged to examine the financial statements of Gamma Corporation for the year ended
June 30. Having completed an examination of the investment securities, which of the following is the
best method of verifying the accuracy of recorded dividend income?
a. Tracing recorded dividend income to cash receipts records and validated deposit slips.
b. Utilizing analytical procedures and statistical sampling.
c. Comparing recorded dividends with amounts appearing on federal information Form 1099.
d. Comparing recorded dividends with a standard financial reporting service’s record of dividends.
5. When the client holds a large amount of negotiable securities, auditors need to plan to guard against
a. Unauthorized negotiation of the securities before they are counted.
b. Unrecorded sales of securities after they are counted.
c. Substitution of securities already counted for other securities that should be on hand but are not.
d. Substitution of authentic securities with counterfeit securities.
6. In connection with the audit of an issue of long-term bonds payable, the auditor should
a. Determine whether bondholders are persons other than owners, directors, or officers of the company
issuing the bond.
b. Calculate the effective interest rate to see if it is substantially the same as the rates for similar issues.
c. Decide whether the bond issue was made without violating state or local law.
d. Ascertain that the client has obtained the opinion of counsel on the legality of the issue.
7. Which of the following is the most important audit consideration when examining the stockholders’
equity section of a client’s balance sheet?
a. Changes in the capital stock account are verified by an independent stock transfer agent.
b. Stock dividends and stock splits during the year under audit were approved by the stockholders.
c. Stock dividends are capitalized at par or stated value on the dividend declaration date.
d. Entries in the capital stock account can be traced to resolutions in the minutes of meetings of the
board of directors.
6. 8. If the auditor discovers that the carrying amount of a client’s investments is overstated because of a
loss in value that is other than a temporary decline in market value, the auditor should insist that
a. The approximate market value of the investments be shown in parentheses on the face of the balance
sheet.
b. The investments be classified as long term for balance sheet purposes with full disclosure in the
footnotes.
c. The loss in value is recognized in the financial statements.
d. The equity section of the balance sheet separately shows a charge equal to the amount of the loss.
9. The primary reason for preparing a reconciliation between interest-bearing obligations outstanding
during the year and interest expense in the financial statements is to
a. Evaluate internal control over securities.
b. Determine the validity of prepaid interest expense.
c. Ascertain the reasonableness of imputed interest.
d. Detect unrecorded liabilities.
10. The auditor should insist that a representative of the client be present during the inspection and
count of securities to
a. Lend authority to the auditor’s directives.
b. Detect forged securities.
c. Coordinate the return of all securities to proper locations.
d. Acknowledge the receipt of securities returned.
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-3-Individual-
Multiple-Choice-Quiz
ACC 492 Week 3 Quiz
1. Internal control is a process effected by an entity’s board of directors, management, and other
personnel that is designed to provide reasonable assurance regarding the achievement of objectives.
2. What are the two main objectives for conducting preliminary analytical procedures?
3. List the two types of audit tests.
4. List three factors that affect an organization's control environment.
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-3-Quiz
ACC 492 Week 3 Team Assignment Audit Program Development
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-3-Team-
Assignment-Audit-Program-Development
ACC 492 Week 4 DQ 1
Describe briefly some of the situations that would require modification of the auditor’s opinion related
to going concern?
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-4-DQ-1
ACC 492 Week 4 DQ 2
What types of opinions does an auditor issue other than unqualified opinion? How does an opinion
other than unqualified opinion affect the client? In your opinion, which is the worst?
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-4-DQ-2
ACC 492 Week 4 Individual Multiple Choice Quiz
1. A CPA found that the company has not capitalized a material amount of leases in the financial
statements. When considering the materiality of this departure from GAAP, the CPA would choose
between which reporting options?
7. a. Unqualified opinion or disclaimer of opinion.
b. Unqualified opinion or qualified opinion.
c. Emphasis paragraph with unqualified opinion or an adverse opinion.
d. Qualified opinion or adverse opinion.
2. An auditor determined that the company is suffering financial difficulty and the going concern status
is seriously in doubt. Even though the company has placed adequate disclosures in the financial
statements, the auditor must choose between which of the following audit report alternatives?
a. Unqualified report with a going-concern explanatory paragraph or disclaimer of opinion.
b. Standard unqualified report or a disclaimer of opinion.
c. Qualified opinion or adverse opinion.
d. Standard unqualified report or adverse opinion.
3. A company accomplished an early extinguishment of debt, and the auditors believe that literal
application of SFAS No. 98 would cause recognition of a loss that would materially distort the financial
statements and cause them to be misleading. Given these facts, the auditor would probably choose
which reporting option?
a. Explain the situation and give an adverse opinion.
b. Explain the situation and give a disclaimer of opinion.
c. Explain the situation and give an unqualified opinion, relying on Rule 203 of the AICPA Code of
Professional Conduct.
d. Give the standard unqualified audit report.
4. Which of these situations would require an auditor to append an explanatory paragraph about
consistency to an otherwise unqualified audit report?
a. Company changed its estimated allowance for uncollectible accounts receivable.
b. Company corrected a prior mistake in accounting for interest capitalization.
c. Company sold one of its subsidiaries and consolidated six subsidiaries this year compared to seven
last year.
d. Company changed its inventory costing method from FIFO to LIFO.
5. Wolfe became the new auditor for Royal Corporation, succeeding Mason, who audited the financial
statements last year. Wolfe needs to report on Royal’s comparative financial statements and should
write in his report an explanation about another auditor having audited the prior year
a. Only if Mason’s opinion last year was qualified.
b. Describing the prior audit and the opinion but not naming Mason as the predecessor auditor.
c. Describing the audit but not revealing the type of opinion Mason gave.
d. Describing the audit and the opinion and naming Mason as the predecessor
auditor.
6. When other independent auditors are involved in the current audit of parts of the company’s
business, the principal auditor can write an audit report that (two answers)
a. Mentions the other auditor, describes the extent of the other auditor’s work, and gives an unqualified
opinion.
b. Does not mention the other auditor and gives an unqualified opinion in a standard unqualified report.
c. Places primary responsibility for the audit report on the other auditors.
d. Names the other auditors, describes their work, and presents only the principal auditor’s report.
7. An “emphasis-of-a-matter” paragraph inserted in a standard audit report causes the report
to be characterized as a(n)
a. Unqualified opinion report.
b. Divided responsibility report.
c. Adverse opinion report.
d. Disclaimer of opinion.
8. Under which of the following conditions can a disclaimer of opinion never be given?
8. a. Going-concern problems are highly material and significant.
b. The company does not let the auditor have access to evidence about important accounts.
c. The auditor owns stock in the company.
d. The auditor has found that the company has used the NIFO (next-in, first-out) inventory costing
method.
9. Where will you find an auditor’s own responsibility for expressing the opinion on financial
statements?
a. Stated explicitly in the introductory paragraph of the standard unqualified report.
b. Unstated but understood in the introductory paragraph of the standard unqualified report.
c. Stated explicitly in the opinion paragraph of the standard unqualified report.
d. Stated explicitly in the scope paragraph of the standard unqualified report.
10. Company A hired Sampson & Delila, CPAs, to audit the financial statements of Company
B and deliver the audit report to Megabank. Which is the client?
a. Megabank.
b. Sampson & Delila.
c. Company A.
d. Company B.
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-4-Individual-
Multiple-Choice-Quiz
ACC 492 Week 4 Quiz
1. The auditor's responsibilities with regard to audit works is usually up to the last date of field works.
2. Name the various types of opinions expressed by an independent auditor.
3. List the three types of going concern issues.
4. Describe very briefly three conditions under which an auditor issues a qualified report.
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-4-Quiz
ACC 492 Week 4 Team Assignment Audit Program Presentation
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-4-Team-
Assignment-Audit-Program-Presentation
ACC 492 Week 5 Individual Assignment Audit Program Simulation
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-5-Individual-
Assignment-Audit-Program-Simulation
ACC 492 Week 5 Team Assignment Case study assignment
http://entirecourse.com/course/ACC-492-Contemporary-Auditing-II/ACC-492-Week-5-Team-
Assignment-Case-study-assignment
