Questions from Auditing and Assurance

Q: Criticize the following statement: “Because the sales department maintains relationships

Criticize the following statement: “Because the sales department maintains relationships with customers, personnel from that department should grant credit and decide when accounts should be written o...

Q: The controller of a new client operating a medium-size manufacturing

The controller of a new client operating a medium-size manufacturing business complains to you that he believes the company has sustained significant losses on several occasions because certain sales...

Q: Comment on the following: “Any voided prenumbered shipping documents should

Comment on the following: “Any voided prenumbered shipping documents should be properly canceled and disposed of to eliminate any possibility of improper shipment of goods.”

Q: The accounts receivable section of the accounting department in Wind Power,

The accounts receivable section of the accounting department in Wind Power, Inc., maintains subsidiary ledgers that are posted from copies of the sales invoices transmitted daily from the billing depa...

Q: Among specific procedures that contribute to good internal control over the business

Among specific procedures that contribute to good internal control over the business processes related to accounts receivable are (a) the approval of uncollectible account write-offs and credit memora...

Q: Many auditors consider the substantiation of the figure for inventory to be

Many auditors consider the substantiation of the figure for inventory to be a more difficult and challenging task than the verification of most other items on the balance sheet. List several specific...

Q: When perpetual inventory records are maintained, is it necessary for a

When perpetual inventory records are maintained, is it necessary for a physical inventory to be taken at the balance sheet date? Explain.

Q: An auditor is sampling with replacement and, by chance, a

An auditor is sampling with replacement and, by chance, a particular account has been selected twice. Should it be included two times in the sample?

Q: What is meant by a “bill and hold” scheme?

What is meant by a “bill and hold” scheme?

Q: What charges and credits may be disclosed in the auditors’ analysis of

What charges and credits may be disclosed in the auditors’ analysis of the Cost of Goods Sold account of a manufacturing concern?