Questions from Auditing and Assurance

Q: A client maintains perpetual inventory records in quantities and in dollars.

A client maintains perpetual inventory records in quantities and in dollars. If the assessed control risk is high, an auditor would probably a. Apply gross profit tests to ascertain the reasonableness...

Q: Describe the activities a company should perform to ensure appropriate reconciliation of

Describe the activities a company should perform to ensure appropriate reconciliation of marketable securities.

Q: An auditor selected items for test counts while observing a client’s physical

An auditor selected items for test counts while observing a client’s physical inventory. The auditor then traced the test counts to the client’s inventory listing. This procedure most likely obtained...

Q: What procedures do auditors employ to audit inventory when the physical inventory

What procedures do auditors employ to audit inventory when the physical inventory is taken on a cycle basis or on a statistical plan but never a complete count on a single date?

Q: What is a compensating control? Give some examples for finance and

What is a compensating control? Give some examples for finance and investment cycle accounts.

Q: Your client counts inventory three months before the end of the fiscal

Your client counts inventory three months before the end of the fiscal year because controls over inventory are excellent. Which procedure is not necessary for the roll-forward? a. Check that shipping...

Q: An auditor is examining a nonpublic company’s inventory procurement system and has

An auditor is examining a nonpublic company’s inventory procurement system and has decided to perform tests of controls. Under which of the following conditions do GAAS require tests of controls be pe...

Q: Which of the following management assertions is an auditor most likely testing

Which of the following management assertions is an auditor most likely testing if the audit objective states that all inventory on hand is reflected in the ending inventory balance? a. The entity has...

Q: A portion of a client’s inventory is in public warehouses. Evidence

A portion of a client’s inventory is in public warehouses. Evidence of the existence of this merchandise can most efficiently be acquired through which of the following methods? a. Observation. b. Con...

Q: Which of the following approaches is most suitable for auditing the finance

Which of the following approaches is most suitable for auditing the finance and investment cycle? a. Perform extensive tests of controls and limit substantive procedures to analytical procedures. b. I...