Questions from Auditing and Assurance

Q: “Auditors are not qualified to pass on the legality of a

“Auditors are not qualified to pass on the legality of a bond issue; this is a question for the company’s attorneys. It is therefore unnecessary for the auditors to inspect the bond indenture.” Critic...

Q: Mansfield Corporation has outstanding an issue of 30-year bonds payable

Mansfield Corporation has outstanding an issue of 30-year bonds payable. There is no sinking fund for these bonds. Under what circumstances, if any, should this bond issue be classified as a current l...

Q: Two assistant auditors were assigned by the auditor-in-charge

Two assistant auditors were assigned by the auditor-in-charge to the verification of long-term liabilities. Some time later, they reported to the auditor-in-charge that they had determined that all lo...

Q: Compare the auditors’ examination of owners’ equity with their work on assets

Compare the auditors’ examination of owners’ equity with their work on assets and current liabilities. Among other factors to be considered are the relative amounts of time involved and the character...

Q: If a sample of 100 items indicates a deviation rate of 3

If a sample of 100 items indicates a deviation rate of 3 percent, should the auditors conclude that the entire population also has approximately a 3 percent deviation rate?

Q: What do you consider to be the most important control a corporation

What do you consider to be the most important control a corporation can adopt with respect to capital stock transactions?

Q: What is the primary responsibility of an independent registrar with respect to

What is the primary responsibility of an independent registrar with respect to capital stock?

Q: In the audit of a small corporation that issues paper stock certificates

In the audit of a small corporation that issues paper stock certificates and does not utilize the services of an independent stock registrar and stock transfer agent, what use is made of the stock cer...

Q: Describe the ordinary role of paper stock certificates when a direct registration

Describe the ordinary role of paper stock certificates when a direct registration system (DRS) is utilized.

Q: You have been retained to perform an audit of Valley Products,

You have been retained to perform an audit of Valley Products, a small corporation that has not been audited during the previous 10 years of its existence. How will your work on the Capital Stock acco...