Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 11, Problem 45P
a.
To determine
Describe the purpose of each control.
b.
To determine
Explain how the operating effectiveness of all the procedures can be determined.
c.
To determine
Describe how the auditor alter the substantive procedure if the operating effectiveness is not adequate to address the increased level of control risk.
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Students have asked these similar questions
Which of the following frames would best enable an auditor to test a sales/receivables system to determine that receivables are supported by all required documentation ?
(a) Customer list
(b) Sales invoice log
Sales order log
(d) Shipping log
Which of the following tests is directed towards the management assertion of completeness of sales?
Question 19 options:
1)
Checking mathematical accuracy of invoices.
2)
Vouching sales recorded to invoices held.
3)
Tracing delivery documents to invoices and sales recorded.
4)
Vouching invoices to delivery documents.
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Indicate whether each of the following audit procedures is a testof controls, a substantive test, or a dual-purpose test. Next, indicate the financial statement assertion most closely related to each audit procedure.
Required:a. Vouch recorded sales invoices to supporting shipping documents.b. Inspect recorded sales invoices for credit approval.c. Vouch recorded sales invoices prices to the approved price list.d. Send confirmations to all customers regarding accounts receivable.e. Recalculate the arithmetic accuracy of the recorded sales invoices.f. Compare the shipment date of recorded sales invoices with the invoice record date.g. Trace recorded sales invoices to posting in the general ledger control account and in the correct customer’s account.h. Select a sample of shipping documents from the shipping department file and trace shipments to recorded sales invoices.i. Scan recorded sales invoices and shipping documents for missing numbers in sequence.j. Vouch sales invoices and…
Chapter 11 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 11 - Explain the difference between a customers order...Ch. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - State briefly the objective of the billing...Ch. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQ
Ch. 11 - Prob. 11RQCh. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. 16RQCh. 11 - Prob. 17RQCh. 11 - Prob. 18RQCh. 11 - Prob. 19RQCh. 11 - Prob. 20RQCh. 11 - Prob. 21RQCh. 11 - Prob. 22RQCh. 11 - Give an example of a type of receivable...Ch. 11 - Prob. 24RQCh. 11 - Prob. 25QRACh. 11 - Prob. 26QRACh. 11 - Prob. 27QRACh. 11 - Prob. 28QRACh. 11 - Prob. 29QRACh. 11 - Prob. 30QRACh. 11 - Prob. 31QRACh. 11 - Prob. 32QRACh. 11 - Prob. 33QRACh. 11 - Prob. 34QRACh. 11 - Prob. 35QRACh. 11 - Prob. 36AOQCh. 11 - Which of the following would provide the most...Ch. 11 - Prob. 36COQCh. 11 - Prob. 36DOQCh. 11 - Prob. 36EOQCh. 11 - Under SEC rules, which of the following is not...Ch. 11 - Prob. 36GOQCh. 11 - Prob. 36HOQCh. 11 - Prob. 36IOQCh. 11 - Prob. 36JOQCh. 11 - Prob. 36KOQCh. 11 - Prob. 36LOQCh. 11 - Prob. 37OQCh. 11 - Prob. 38OQCh. 11 - An auditors working papers include the following...Ch. 11 - Prob. 40OQCh. 11 - Prob. 41OQCh. 11 - Prob. 42OQCh. 11 - Prob. 43OQCh. 11 - Prob. 44PCh. 11 - Prob. 45PCh. 11 - Prob. 46PCh. 11 - Prob. 47PCh. 11 - The July 31, 20X0, general ledger trial balance of...Ch. 11 - Prob. 49ITCCh. 11 - Prob. 50ECCh. 11 - Prob. 51EC
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Similar questions
- Payable ICQ Items: Assertions, Tests of Controls, and Possible Errors or Frauds. Following is a selection of items from internal control questionnaires.1. Are purchase orders above a certain level approved by an officer?2. Are the quantity and quality of goods received determined at the time of receipt by receiving personnel independent of the purchasing department?3. Are vendors’ invoices matched against purchase orders and receiving reports before a liability is recorded?4. Are journal entries authorized at appropriate levels?Required:For each preceding item:a. Identify the management assertion to which it applies.b. Specify one test of controls auditors could use to determine whether the control was operating effectively.c. Give an example of an error or fraud that could occur if the control were absent or ineffective.d. Write a substantive procedure that could find errors or frauds that could result from the absence or ineffectiveness of the control items.arrow_forwardWhich of the following test controls most likely would help assure an auditor that goods shipped are properly billed? A. Scan the sales journal for sequential and unusual entries. B. Examine shipping documents for matching sales invoice. C. Compare the accounts receivalbe ledger to daily sales summaries. D. inspect unused sales invoices for consecutive prenumbering.arrow_forwardof stion For a sample of sales transactions selected from the sales journal, verify that the amount of the transaction has been recorded in the correct customer account in the accounts receivable subledger. Choose the Audit Objective: Choose the specific audit objective →arrow_forward
- Each of the below describes a procedure consistent with a strong system of internal control except… Question 7 options: The customer order department determines when a sale has occurred and should be recorded. The accounts payable department agrees purchase requisitions, purchase orders, receiving reports, and invoices prior to payment. Quantities ordered are excluded from the receiving department copy of a purchase order so receiving personnel count and inspect merchandise received. The use of remittance advices for customers' payments on accounts receivable received in the mail.arrow_forwardThe following can be appropriately included in an Internal Control Questionnaire for Revenue/Receipt Cycle, except *A. Is the credit department independent of the sales department?B. Are debit or credit memos independently checked against sales invoice data?C. Are accounts receivable periodically reviewed and aged?D. Does the cashier compare the official receipt, deposit slip, and cash receipts journal?E. None of themarrow_forwardWhich of the following will be the most appropriate test to determine wherether purchase orders are being processed on a timely basis? a. Determine the dates of unpaid accounts payable invoices. b.Compare dates of selected purchase orders with those of purchase requisitions c.select a block of used purchase order numbers and account for all number in the block d. discuss proccessing procedures with operating personnel and observe actual processing of purchases.arrow_forward
- The auditor verifying whether all goods received by the company have been recorded appropriately. The source document that the auditor would test would mostly likely be the? A. Supplier Invoice B. Purchase Orders C. Receiving Reports D. Check Vouchersarrow_forwardChoose the one correct answer. Which of the following Test of Controls is done to examine whether purchase orders, receiving reports and vouchers are prenumbered and accounted for? *Select samples from creditors list and send creditors’ confirmation. Examine evidence of approval of unusual trade terms and discounts. Trace samples of goods received notes to the related suppliers’ invoices and entries in the purchase journal and in creditors’ ledger. Review bank statements for any unrecorded cheques payments.arrow_forwardWhich of the following statements is correct? Select one: a. Account receivable turnover is equal to net credit sales divided by average net accounts receivable. b. Buying aged receivables from businesses and then collects the payments directly from the customers is called Allowance for uncollectible accounts. c. Auto generated document numbers is a fraud preventive method which is more efficient than physical controls. d. If the same people are responsible for a series of related accounting activities is called Segregation of Duties.arrow_forward
- To gather audit evidence about the proper credit approval of sales (i.e., valuation assertion), the auditor would select a sample of documents from the population represented by the a. Subsidiary customers' accounts ledger. b. Sales invoice file. c. Bill of lading file. d. Customer order file.arrow_forward1. For each of the following audit procedures, identify A- the type of audit evidence and B- the related audit objective. a. Ask the accounts payable clerk about procedures for verifying prices, quantities, and extensions on vendors’ invoices – b. Vouch entries in sales journal to sales invoices and related shipping documents. – c. Examine the footnotes about the company’s policies for recording revenue transactions to determine whether the disclosures are reasonable d. Examine expense voucher packages and related vendors’ invoices for approval of expense account classification. e. Add the sales journal for the month of July and trace amounts to the general ledger f. Compare the quantities on hand and unit prices on this year’s inventory count sheets with those in the preceding year as a test for large differences. g. Test the extension of unit prices times quantity on the inventory list for a sample of items, test foot the list, and compare the total to the general ledger. h. Trace…arrow_forward
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