Audit Review Questions

686 WordsMay 10, 20153 Pages
Auditing Final Review Questions Chloe Granahan 1. Assume that the audit team notes the client has made a significant change in its product line which requires that new equipment be purchased. Which of the following would be of greatest concern to the auditor? A. Inappropriate book value of new equipment. B. Impaired value of new equipment. C. Impaired value of old equipment. D. Inappropriate depreciation calculation for new equipment. 2. A. B. C. D. Audit procedures should be proportional to which of the following? The assessed Risks Size of the Client Size of the Firm The Assessed misstatements 3. Which of the following assertions are usually the two most relevant assertions related to…show more content…
During your audit of Brown Company you are trying to determine whether all accounts payable were recorded. Which assertion are you gathering evidence for? A. Occurrence B. Presentation and Disclosure C. Completeness. D. Valuation or allocation. 9. Which of the following procedures will usually be performed by the auditor to actively determine obsolete inventory? A. Confirmation of inventory with customers. B. Footing the inventory subsidiary ledger C. Tracing inventory ordered by the client to receiving reports D. Analysis of inventory turnover and sales reports. 10. A risk to the auditor due to the complexity of physical inventory includes the possibility of which of the following? A. Overstatement of individual items across multiple locations for cutoff testing. B. Utility of the items exceeding their cost for existence testing C. Movement of goods during existence testing D. Stocking of only one type of inventory in the warehouse for presentation and disclosure testing. 11. Bank transfer schedules are used by the auditor to address which of the following concerns? A. Kiting B. Lapping C. Embezzlement by omitting outstanding checks on reconciliation. D. All of the above 12. How will the auditor most likely utilize the bank reconciliation as evidence in the audit of cash? A. The auditor sends the reconciliation to the bank for independent

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