Questions from Auditing and Assurance

Q: As a part of your clerical tests of inventory for Martin Manufacturing

As a part of your clerical tests of inventory for Martin Manufacturing, you have tested about 20% of the dollar items and have found the following exceptions: 1. Extension errors: 2. Differences locat...

Q: What is the relationship between the audit of property, plant,

What is the relationship between the audit of property, plant, and equipment accounts and the audit of repair and maintenance accounts? Explain how the auditor organizes the audit to take this relatio...

Q: List and briefly state the purpose of all audit procedures that might

List and briefly state the purpose of all audit procedures that might reasonably be applied by an auditor to determine that all property, plant, and equipment retirements have been recorded in the acc...

Q: In auditing depreciation expense, what major considerations should the auditor keep

In auditing depreciation expense, what major considerations should the auditor keep in mind? Explain how each can be verified.

Q: Explain the relationship between substantive tests of transactions for the acquisition and

Explain the relationship between substantive tests of transactions for the acquisition and payment cycle and tests of details of balances for the verification of prepaid insurance.

Q: Explain why the audit of prepaid insurance should ordinarily take a relatively

Explain why the audit of prepaid insurance should ordinarily take a relatively small amount of audit time if the client’s assessed control risk for acquisitions is low.

Q: Distinguish between the evaluation of the adequacy of insurance coverage and the

Distinguish between the evaluation of the adequacy of insurance coverage and the verification of prepaid insurance. Explain which is more important in a typical audit.

Q: What are the major differences between the audit of prepaid expenses and

What are the major differences between the audit of prepaid expenses and other asset accounts such as accounts receivable or property, plant, and equipment?

Q: Evaluate the following statement by an auditor concerning tests of acquisitions and

Evaluate the following statement by an auditor concerning tests of acquisitions and cash disbursements: “In selecting the acquisitions and cash disbursements sample for testing, the best approach is t...

Q: Explain the relationship between accrued rent and substantive tests of transactions for

Explain the relationship between accrued rent and substantive tests of transactions for the acquisition and payment cycle. Which aspects of accrued rent are not verified as part of the substantive tes...