Audit Final - 54-80

A proof of cash includes a reconciliation of cash receipts deposited in the bank with the cash disbursements records for a given period.

Which of the following items would not normally appear on bank reconciliations?

Which of the following procedures might be useful in discovering a contingent liability for a lawsuit that management is intentionally neglecting to disclose?

When using nonstatistical sampling, the larger the sample size, the greater the auditor’s confidence that the point estimate is close to the true population value.

The standard letter of inquiry to the client’s legal counsel should be prepared on:

Which of the following items would ordinarily not be included in the standard letter of inquiry to the client’s attorney?

The failure to capitalize a permanent asset, or the recording of an asset acquisition at the improper amount, affects the balance sheet:

The reason for testing the client’s bank reconciliation is to verify whether the client’s recorded bank balance is the same amount as the actual cash in bank, except for deposits in transit, checks outstanding, and other reconciling items. The information needed to complete the tests of the reconciliation are provided by the:

Imprest accounts usually carry a significant balance.

Analytical procedures are substantive tests and, if the results of the analytical procedures are favorable, the auditor will:

Auditors of public companies must obtain certain representations from management regarding internal control over financial reporting.

Which of the following is likely to be determined first when performing tests of details for accounts receivable?

Controls over the acquisition and recording of insurance are a part of the ________.

When auditors evaluate sales returns and allowances, a primary emphasis is on the objective of occurrence.

Blank confirmations are considered less reliable than standard positive confirmations.

A bill of lading is a special type of sales invoice used when goods are shipped interstate.

A bill of lading is a written contract between the seller and the buyer.

Monetary unit sampling is also referred to as all of the following except:

At the completion of the audit, management is typically asked to make a written statement as a part of the engagement letter that it is aware of no undisclosed contingent liabilities.

Which of the following is not required to be communicated to the audit committee or similarly designated body under auditing standards?

Many of the auditor’s audit procedures in the audit of cash center around the client’s bank confirmations.

An auditor needs to determine whether all customers of an electric utility company are being billed. The auditor should test from the:

A proof of cash is effective at identifying which of the following misstatements?

For good internal control, the credit-granting function should be separate from the sales function.

There is very little opportunity for confirmation from third parties of balance sheet accounts related to the payroll and personnel cycle.

Which of the following audit procedures would be least likely to lead the auditor to find an unrecorded fixed asset disposal?

The most important test of details of balances to determine the existence of recorded accounts receivable is: