Connect Access Card for Principles of Auditing & Other Assurance Services
21st Edition
ISBN: 9781260299366
Author: Ray Whittington, Kurt Pany
Publisher: McGraw-Hill Education
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Chapter 13, Problem 29QRA
To determine
List the purpose of
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Students have asked these similar questions
As a financial auditor who is auditing long-lived assets, from the income statement, describe two accounts that become your concern and require further examination? Explain why it becomes your concern and explain what kinds of audit procedures you will use in order to further examination of that account?
Listed below are several of the auditors’ general objectives in performing substantive procedures on an asset account:
Establish the existence of assets.
Establish that the company has rights to the assets.
Establish the completeness of recorded assets.
Verify the cutoff of transactions.
Determine the appropriate valuation of the assets.
Establish the clerical accuracy of the underlying records.
Determine the appropriate financial statement presentation and disclosure of the assets.
Required:
Indicate the general objective (or objectives) of each of the following audit procedures:
a. Observe the client’s physical inventory.
b. Locate on the client’s premises a sample of the equipment items listed in the subsidiary plant and equipment ledger.
c. Obtain a listing of inventory and reconcile the total to the general ledger.
d. Trace a sample of shipping documents to recorded sales transactions.
e. Identify related parties.
f. Vouch selected purchases of…
The auditor is MOST likely to learn of retirements of equipment through which of the following?
a.
Review of the purchase and allowance account.
b.
Review of the sales discount account.
c.
Analysis of the credits to the accumulated depreciation account.
d.
Review of insurance policy riders.
e.
Confirmation of recorded credits to the accounts payable account.
Chapter 13 Solutions
Connect Access Card for Principles of Auditing & Other Assurance Services
Ch. 13 - Prob. 1RQCh. 13 - K-J Corporation has current assets of 5 million...Ch. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Explain the use of a system of authorizations for...Ch. 13 - Moultrie Company discovered recently that a number...Ch. 13 - Does a failure to record the retirement of...Ch. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - Prob. 10RQ
Ch. 13 - Prob. 11RQCh. 13 - Prob. 12RQCh. 13 - Prob. 13RQCh. 13 - Prob. 14RQCh. 13 - Prob. 15RQCh. 13 - Gibson Manufacturing Company acquired new factory...Ch. 13 - Prob. 17RQCh. 13 - Do the auditors question the service lives adopted...Ch. 13 - Prob. 19RQCh. 13 - Explain how the existence of lease agreements may...Ch. 13 - Prob. 21RQCh. 13 - Prob. 22QRACh. 13 - Prob. 23QRACh. 13 - Gruen Corporation is a large diversified company...Ch. 13 - Prob. 25QRACh. 13 - Prob. 26QRACh. 13 - Prob. 27QRACh. 13 - Prob. 28QRACh. 13 - Prob. 29QRACh. 13 - Prob. 30QRACh. 13 - Prob. 31QRACh. 13 - To assure accountability for fixed-asset...Ch. 13 - Prob. 32BOQCh. 13 - Which of the following is an internal control...Ch. 13 - Which of the following accounts should be reviewed...Ch. 13 - Prob. 32EOQCh. 13 - Prob. 32FOQCh. 13 - Which of the following statements is not typical...Ch. 13 - Prob. 32HOQCh. 13 - Prob. 32IOQCh. 13 - An effective procedure for identifying unrecorded...Ch. 13 - Which of the following is not an overall test of...Ch. 13 - Prob. 32LOQCh. 13 - Prob. 33OQCh. 13 - Analysis of which account is least likely to...Ch. 13 - Prob. 34BOQCh. 13 - Prob. 34COQCh. 13 - Prob. 34DOQCh. 13 - A search for overstated property, plant, and...Ch. 13 - The following are typical questions that might...Ch. 13 - Prob. 36PCh. 13 - Prob. 37PCh. 13 - Chem-Lite, Inc., maintains its accounts on the...Ch. 13 - Prob. 39PCh. 13 - You are reviewing the property, plant, and...
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- Following the date of the financial statements, auditors complete the substantive processes. Identify the most common actions that auditors do.arrow_forwardWhich documents would an auditor most likely choose to examine closely to ascertain that all expenditures incurred during the accounting period have been recorded as a liability?a. invoices b. purchase orders c. purchase requisitions d. receiving reportsarrow_forwardAudit documentation that shows the detailed evidence and procedures regarding the balancein the accumulated depreciation account for the year under audit will be found in thea. Current file audit documentation.b. Permanent file audit documentation.c. Administrative audit documentation in the current file.d. Planning memorandum in the current file.arrow_forward
- explain the process of auditing the followingtransactions/accounts below. • Inventories• Property, plant, and equipment (PPE)• Renewal and reconditioning costs• Revenues• Rehabilitation bondsarrow_forwardDiscuss the auditor’s responsibility for detecting subsequent events(a) prior to the completion of field work;(b) prior to signing the audit report, and(c) between the date of the audit report and the issuance of the financialreport.arrow_forwardWhich of the following best describes the independent auditor's approach to obtaining satisfaction concerning depreciation expense in the income statement? a.Review the mathematical accuracy of the amounts charged to income as a result of depreciation expens b.Determine the method of computing depreciation expense and ascertain that it is in accordance with generally accepted accounting principle c.Support the basis of depreciable assets and the depreciation expens d.Reconcile the amount of depreciation expense to those amounts credited to accumulated depreciation account e.Select a sample of equipment items in the manufacturing facility and vouch back to the recorded subsidiary ledge r.s.e.s.e.ry ledger.arrow_forward
- My question is on auditing where I want to know whether the audit evidence is sufficient and appropriate such as oral representation by management, year end suppliers statement and physical inspection of a non current assetsarrow_forwardWhat is the relationship between the audit of property, plant, andequipment accounts and the audit of repair and maintenance accounts? Explain how theauditor organizes the audit to take this relationship into consideration.arrow_forwardIn auditing depreciation expense, what major considerationsshould the auditor keep in mind? Explain how each can be verifiedarrow_forward
- Describe the financial statement's aims and purposes, and explain how the auditor intends to verify them via his audit plan for the financial statements (You can assume necessary details).arrow_forwardDescribe a number of audit processes the auditor may use to evaluate whether all of the money received was properly documented..arrow_forwardIn the examination of property, plant, and equipment, the auditor tries to determine all of the followingexcept theA. Effectiveness of the internal control structureB. Authorization of property abandoned during the yearC. Presence of an insurance policy related to property, plant, and equipmentD. Availability of company’s depreciation policyE. None of themarrow_forward
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