Questions Chapter 14
what are the primary transactions in the sales and collection cycle ?
What four criteria does the SEC require in order to recognize revenue
what is the objective of AU-C section 315?
What steps must we document to demonstrate a minimal understanding of the
accounting system ?
What is the objective of AU-C section 500?
Describe Vouching
Describe Tracing
What is the achieved detection risk (not planned detection risk) at the start of every
audit ?
How do we reduce detection risk ?
what is the audit risk model ?
In the Sales Journal ---- Are you going to audit the last 25 entries prior to 12/31/13 or
the first 25 entries after 1/1/14
Will you Vouch orTrace ?
do you want to audit the last 25 orders that were actually shipped prior to 12/31/13 or
the first 25 orders that were shipped in January of 2014
will you Vouch or Trace ?
what does the evidence indicate if you agree the last 25 entries in the Sales Journal,
prior to 12/31/13 to Shipping Documents dated prior to 12/31/13?
what does the evidence indicate if you agree the last 25 entries in the Sales Journal,
prior to 12/31/13, to Shipping Documents which are dated after 1/1/14?
what would the evidence indicate if you agree the last 25 shipments on Dec. 31, 2013
into the 2013 Sales Journal?
what would the evidence indicate if you agree the first 25 shipments on Jan. 1, 2014
into the 2014 Sales Jnl ?
what would the evidence indicate if you agree the first 25 shipments on Jan. 1, 2014
into the 2013 Sales Journal?
What opinion would you issue? While performing substantive tests you find material
misstatements in the financial statements and the client refuses to correct their financial
statements?
What opinion would you issue? While performing substantive tests you find material
misstatements in the financial statements and the client agrees to make the necessary
adjustments prior to issuing the financial statements.
What does it imply about the effectiveness of their internal controls if you find material
misstatements while performing substantive tests?
You are auditing the cash receipt journal. Are you going to audit the last 25 entries prior
to 12/31/13 or the first 25 entries after 1/1/14?
will you Vouch or Trace ?
with which financial statement assertion (other than cutoff) are you most concerned if
we are auditing cash receipts?
You are auditing cash disbursements. Will you audit the last 25 entries in the CD Jnl
prior to Dec. 31st or the first 25 entries after Jan 1st 2014?
with which financial statement assertion are you most concerned if you are auditing
cash disbursements ?
Give me an example of evidence that would support the recorded balance if you are
auditing the last 25 entries in the cash receipts journal prior to 12/31/13.
Give an example of evidence that indicates Cash Receipts are overstated if you are
auditing the last 25 entries in the cash receipts journal prior to 12/31/13.
Give an example of evidence that would indicate cash disbursements are correct if you
are auditing the first 25 entries in the CD Jnl dated 1/1/2014..
Give an example of evidence that would indicate cash disbursements are understated if
you are auditing the first 25 entries in the CD Jnl dated 1/1/2014.