Questions from Auditing and Assurance

Q: Explain the relationship of tolerable misstatement, inherent risk, and control

Explain the relationship of tolerable misstatement, inherent risk, and control risk to planned tests of details of balances.

Q: List the eight balance-related audit objectives in the verification of

List the eight balance-related audit objectives in the verification of the ending balance in inventory and provide one useful audit procedure for each of the objectives.

Q: Why do auditors often consider it desirable to perform audit tests throughout

Why do auditors often consider it desirable to perform audit tests throughout the year rather than wait until year-end? List several examples of evidence that can be accumulated before year-end

Q: Describe the four phases performed by the auditor when obtaining an understanding

Describe the four phases performed by the auditor when obtaining an understanding of internal control and assessing control risk.

Q: Explain how the calculation and comparison to previous years of the gross

Explain how the calculation and comparison to previous years of the gross margin percentage and the ratio of accounts receivable to sales are related to the confirmation of accounts receivable and oth...

Q: Explain what is meant by block sample selection and describe how an

Explain what is meant by block sample selection and describe how an auditor can obtain five blocks of 20 sales invoices from a sales journal.

Q: The following questions concern types of audit tests. Choose the

The following questions concern types of audit tests. Choose the best response. a. The auditor looks for an indication on duplicate sales invoices to see whether the accuracy of invoices has been veri...

Q: Define the meaning of the term materiality as it is used in

Define the meaning of the term materiality as it is used in accounting and auditing. What is the relationship between materiality and the phrase obtain reasonable assurance used in the auditor's repor...

Q: Explain the importance of proper credit approval for sales. What effect

Explain the importance of proper credit approval for sales. What effect do adequate controls in the credit function have on the auditor's evidence accumulation?

Q: The following questions deal with tests of controls. Choose the best

The following questions deal with tests of controls. Choose the best response. a. Which of the following statements about tests of controls is most accurate? (1) Auditing procedures cannot concurrentl...