Questions from Auditing and Assurance

Q: During the confirmation of accounts receivable, an auditor receives a confirmation

During the confirmation of accounts receivable, an auditor receives a confirmation via the client’s fax machine. Which of the following actions should the auditor take? a. Not accept the confirmation...

Q: Revenues are normally considered to have been earned when a.

Revenues are normally considered to have been earned when a. All possibility of return has expired. b. The company has substantially accomplished what it must to be entitled to the benefits. c. The ca...

Q: Sales are normally recorded on the date of the a.

Sales are normally recorded on the date of the a. Customer purchase order. b. Bill of lading. c. Sales invoice. d. Payment check.

Q: What are some red flags that may indicate a cover-up

What are some red flags that may indicate a cover-up or concealment of a fraud?

Q: When auditing the revenue and collection cycle, auditors normally select balances

When auditing the revenue and collection cycle, auditors normally select balances to confirm from the a. Sales journal. b. Accounts receivable listing. c. General ledger. d. Cash receipts listing.

Q: The control procedure “credit sales approved by credit department” is

The control procedure “credit sales approved by credit department” is directed toward which assertion? a. Existence/Occurrence. b. Completeness. c. Valuation/Accuracy. d. Cutoff.

Q: Which of the following would be the best protection for a company

Which of the following would be the best protection for a company that wishes to prevent the “lapping” of trade accounts receivable? a. Separate duties so that the bookkeeper in charge of the general...

Q: Which of the following internal control activities will most likely prevent the

Which of the following internal control activities will most likely prevent the concealment of a cash shortage by improperly writing off a trade account receivable? a. Write-offs must be approved by a...

Q: Embezzlement is a type of fraud that involves a. An

Embezzlement is a type of fraud that involves a. An employee’s misappropriating an employer’s money or property not entrusted to him or her. b. A manager’s falsification of financial statements for th...

Q: What effect do entity level controls have on the control risk assessments

What effect do entity level controls have on the control risk assessments of an auditor?