Auditing and Assurance Services (16th Edition)
16th Edition
ISBN: 9780134065823
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Chapter 16, Problem 5RQ
To determine
Provide the balance-related audit objectives and also list its
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Check out a sample textbook solutionStudents have asked these similar questions
State four specific balance-related audit
objectives for accounts payable and, for each
objective, describe one common test of
details of balances. (Auditing problem)
The following are specific balance-related audit objectives applied to the audit of accounts receivable (a. through i.) and management assertions about account balances (1 through 6). The list
referred to in the specific balance-related audit objectives is the list of the accounts receivable from each customer at the balance sheet date.
i (Click the icon to view the audit objectives.)
i (Click the icon to view the management assertions.)
Requirement
For each specific balance-related audit objective, identify the appropriate management assertion. (Hint: See table.)
Specific balance-related audit objective
There are no unrecorded receivables.
b. Uncollectible accounts have been provided for.
C. Receivables that have become uncollectible have been written off.
d.
All accounts on the list are expected to be collected within 1 year.
The total of the amounts on the accounts receivable listing agrees with the
general ledger balance for accounts receivable.
a.
e.
Management assertion
Below are five audit procedures, all of which are tests of transactions associated with the audit of the acquisition and payment cycle. Also below are the six general transaction-related audit objectives and the five management assertions. For each audit procedure, indicate (1) its audit objective, and (2) the management assertion being tested.
Audit Objectives:
A. Occurrence
B. Completeness
C. Accuracy
D. Posting and Summarization
E. Classification
F. Timing
Management Assertions:
V. Occurrence
W. Completeness
X. Accuracy
Y. Classification
Z. Cutoff
Audit Procedures
1. Foot the purchases journal and trace the totals to the related general ledger accounts. __________________ ______________________
2. Recompute the cash discounts taken by the client. _____________________ _________________________
3. Compare dates on cancelled checks with the bank cancellation date. _________________ __________________________
4. Trace from a sample of cancelled checks to the…
Chapter 16 Solutions
Auditing and Assurance Services (16th Edition)
Ch. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Prob. 3RQCh. 16 - Explain why you agree or disagree with the...Ch. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - Prob. 10RQ
Ch. 16 - Under what circumstances is it acceptable to...Ch. 16 - Prob. 12RQCh. 16 - Prob. 13RQCh. 16 - Prob. 14RQCh. 16 - Prob. 15RQCh. 16 - Prob. 16RQCh. 16 - Prob. 17RQCh. 16 - Prob. 18RQCh. 16 - Prob. 19.1MCQCh. 16 - Prob. 19.2MCQCh. 16 - c. After a CPA has determined that accounts...Ch. 16 - The following questions deal with confirmation of...Ch. 16 - Prob. 20.1MCQCh. 16 - Prob. 20.2MCQCh. 16 - Prob. 21.1MCQCh. 16 - Prob. 21.2MCQCh. 16 - Prob. 21.3MCQCh. 16 - Prob. 22.3MCQCh. 16 - Which of the following is least likely to be a...Ch. 16 - The following questions concern auditor...Ch. 16 - Prob. 23DQPCh. 16 - Prob. 25DQPCh. 16 - Prob. 24DQPCh. 16 - The following misstatements are sometimes found in...Ch. 16 - Prob. 27DQPCh. 16 - Niosoki Auto Parts sells new parts for foreign...Ch. 16 - Prob. 29DQPCh. 16 - Prob. 30DQPCh. 16 - (OBJECTIVES 16-2, 16.3) The Albring Company sells...Ch. 16 - Prob. 36C
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- Explain how management assertions, general balance-relatedaudit objectives, and specific balance-related audit objectives are developed for anaccount balance such as accounts receivable.arrow_forwardThe following are two specific audit objectives in the audit of accounts payable. The list referred to is the list of accounts payable taken from the accounts payable subsidiary record. The total amount in the list agrees with the accounts payable balance in the general ledger. For the audit of accounts payable, which of these two specific audit objectives is usually more important? Group of answer choices a. Audit of existence. b. Audit of completeness.arrow_forwardThe following are two specific audit objectives in the audit of accounts payable. The list referred to is the list of accounts payable taken from the accounts payable subsidiary record. The total amount in the list agrees with the accounts payable balance in the general ledger. Which of these two audit objectives validates the management assertion of existence, and which one applies to completeness? Group of answer choices 1. All accounts payable included in the list represent amounts due to valid vendors. a. existence b. occurrence 2. There are no unrecorded accounts payable. a. existence b. occurrencearrow_forward
- Management Assertions and Audit Objectives. The following are management assertions (1 through 9) and audit objectives applied to the audit of accounts payable ((a) through (h)). Management Assertion: 1 Existence 2 Rights and obligations 3 Occurrence 4 Completeness 5 Valuation and allocation 6 Accuracy 7 Cutoff 8 Classification 9 Understandibility Specific Audit Objective: (a) Existing accounts payable are included in the accounts payable balance on the balance sheet date. (b) Accounts payable are recorded in the proper account. (c) Acquisition transactions in the acquisition and payment cycle are recorded in the proper period. (d) Accounts payable representing the accounts payable balance on the balance sheet date agree with related subsidiary ledger amounts, and the total is correctly added and agrees with the general ledger. (e) Accounts in the acquisition and payment cycle are properly disclosed according to IASs. (f) Accounts payable representing the…arrow_forwardDiscuss the meaning of the following terms and how they apply to auditing accounts receivable: a. tie-in b. completeness c. existence d. accuracy e. rights f. realizable value g. cutoff h. classification Please provide references.arrow_forwardIndicate a specific audit procedure under each of the following categories, as applied particularly in the sales and collection cycle.a. test of controlb. substantive test of transactionsc. substantive test of account balancesarrow_forward
- Explain FIVE differences between a financial statement and an internal audit engagementarrow_forwardWhat tools do auditors use to verify the ending balances in the various accounts in the acquisition and payments cycle? Please provide reference(s).arrow_forwardGive five (5) substantive audit procedure in the audit of revenue cycle and identify the relevant assertions affected. What are the source documents needed? Discuss.arrow_forward
- What are the four types of audit reports?arrow_forwardAn auditor will most likely review an entity’s periodic accounting for the numerical sequence of shipping documents to ensure all documents are included to support management’s assertion about classes of transactions of: Select one: a. occurrence. b. completeness c. classification. d. accuracyarrow_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
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