Quiz
Auditing Chapter 10 Pre Quiz
Questions in this quiz (10)
1Which of the following assertions is relevant to whether the cash balances reflect the true underlying economic value of those assets?
- AExistence/occurrence
- BCompleteness
- CRights and obligations
- DValuation or allocation
- EAll of these
2Affirmative answers to which of the following questions would lead the auditor to assess fraud risk at a higher level for cash?
- AIs an individual with access to cash or its recording experiencing financial or personal distress?
- BIs an individual with access to cash or its recording being compensated at an amount that he or she might consider low?
- CIs the company in potential violation of its debt covenants?
- DTwo of the three narrative answered choices given.
- EAll of these
3The first step in performing planning analytical procedures is to develop an expectation of the account balance. Which of the following does not typically represent a likely expected relationship for cash accounts?
- AThe company reports consistent profits over several years, but operating cash flows are declining.
- BNo unusual large cash or other liquid asset transactions are found
- COperating cash flow is not significantly different from that of the prior year
- DInvestment income is consistent with the level of and returns expected from the investments
- EAll of these represent likely expected relationships
4Refer to Exhibit 10.6. Which of the following represents a reasonable test of controls for cash receipts?
- ADocument internal controls over cash by completing the internal control questionnaire or by flowcharting the process
- BSegregation of duties between those handling cash and those recording cash transactions.
- CObtain a bank confirmation
- DObtain a bank cutoff statement
- EAll of these
5Refer to Exhibit 10.15. Which of the following assertions is relevant to the audit procedure for marketable securities that requires the auditor to examine selected documents to identify any restrictions on the securities?
- AExistence/occurrence
- BCompleteness
- CRights and obligations
- DValuation or allocation
- EAll of these
6A fake cash problem relates to management's cash valuation assertion.
- ATrue
- BFalse
7Controls for completeness of cash are important because they help to provide reasonable assurance that the cash exists.
- ATrue
- BFalse
8Because a primary concern is that cash will be stolen and thus understated, the auditor is not usually concerned about overstatements of cash.
- ATrue
- BFalse
9Because of the level of inherent risk associated with cash accounts, auditors are required to test the controls over cash accounts.
- ATrue
- BFalse
10When there is a ready market for financial instruments, the audit procedures related to valuation and disclosures are more straightforward than when the instrument is not readily marketable.
- ATrue
- BFalse
Information
- Description
- Auditing Chapter 10 Pre Quiz
- Author
- Kayla Harbaugh
- Language
- English
- Views
- 92
- Tags
- Rating
- No ratings yet Rate this quiz