Questions from Auditing and Assurance

Q: Union Pacific Corp. opened its new 19-story, $

Union Pacific Corp. opened its new 19-story, $260 million headquarters in Omaha, Nebraska. The railroad operator is the owner of the city’s largest building, the Union Pacific Center. Under an initial...

Q: You are in charge of the audit of the financial statements of

You are in charge of the audit of the financial statements of Demot Corporation for the year ended December 31. The corporation has a policy of investing its surplus funds in marketable securities. It...

Q: Your client took a complete physical inventory count under your observation as

Your client took a complete physical inventory count under your observation as of December 15 and adjusted the inventory control account (perpetual inventory method) to agree with the physical invento...

Q: In the audit of investment securities, auditors develop specific audit assertions

In the audit of investment securities, auditors develop specific audit assertions related to the investments. They then design specific substantive procedures to obtain evidence about each of these as...

Q: In connection with the audit of an issue of long-term

In connection with the audit of an issue of long-term bonds payable, the audit team should a. Determine whether bondholders are persons other than owners, directors, or officers of the company issuing...

Q: Which of the following is the most important audit consideration when examining

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...

Q: If the auditors discover that the carrying amount of a client’s investments

If the auditors discover 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, they should insist that a....

Q: The primary reason for preparing a reconciliation between interest-bearing obligations

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 o...

Q: When a client company does not maintain its own capital stock records

When a client company does not maintain its own capital stock records, the auditors should obtain written confirmation from the transfer agent and registrar concerning a. Restrictions on the payment o...

Q: The auditors should insist that a representative of the client be present

The auditors should insist that a representative of the client be present during the inspection and count of securities to a. Lend authority to the auditors’ directives. b. Detect forged securities. c...