Questions from Auditing and Assurance

Q: If a corporation overstates its earnings, are its liabilities more likely

If a corporation overstates its earnings, are its liabilities more likely to be overstated or understated? Explain.

Q: What effects will an auditor’s belief that the population’s actual deviation rate

What effects will an auditor’s belief that the population’s actual deviation rate exceeds the tolerable deviation rate have on the test of controls sample size?

Q: In achieving adequate internal control over operations of the accounts payable department

In achieving adequate internal control over operations of the accounts payable department, a company should establish procedures that will ensure that extensions and footings are proved on all invoice...

Q: Which do you consider the more significant step in establishing strong internal

Which do you consider the more significant step in establishing strong internal control over accounts payable transactions: the approval of an invoice for payment or the issuance of a check in payment...

Q: For which documents relating to the accounts payable operation would you recommend

For which documents relating to the accounts payable operation would you recommend the use of serial numbers as an internal control activity?

Q: What internal control activity would you recommend to call attention to a

What internal control activity would you recommend to call attention to a failure to pay invoices within the discount period?

Q: During the verification of the individual invoices composing the total of accounts

During the verification of the individual invoices composing the total of accounts payable at the balance sheet date, the auditors discovered some receiving reports indicating that the merchandise cov...

Q: As part of the investigation of accounts payable, auditors sometimes vouch

As part of the investigation of accounts payable, auditors sometimes vouch entries in selected creditors’ accounts back through the journals to original documents, such as purchase orders, receiving r...

Q: Outline a method by which the auditors may test the propriety of

Outline a method by which the auditors may test the propriety of cash discounts taken on accounts payable.

Q: Is the confirmation of accounts payable by direct communication with vendors as

Is the confirmation of accounts payable by direct communication with vendors as useful and important an audit procedure as such confirmation of accounts receivable? Explain.