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Describe the assertions for revenue transactions and events Discuss some example tests of controls that the auditor could use for Occurrence and Completeness
assertions
When an entity does not adequately segregate duties, the possibility of cash being stolen before it is recorded is increased If the auditor suspects that this type of defalcation is possible, what type of audit procedures can he or she use to test this possibility?
Describe the assertions for revenue transactions and events Discuss some example tests of controls that the auditor could use for Authorization, Accuracy assertions
Describe the assertions for cash receipt transactions and events Discuss some example tests of controls that the auditor could use for Completeness and Classification assertions
What control activities typically ensure that the occurrence, authorization, and
completeness assertions are met for a purchase transaction? What tests of controls are performed for each of these assertions?
What control activities typically ensure that the Accuracy and Occurrence assertion is met for inventory transactions? What tests of controls are performed
for each of these assertions?
What control activities typically ensure that the Authorization and Occurrence
assertion is met for acquisition of PPE transactions? What tests of controls are
performed for each of these assertions?
List two substantive analytical procedures that can test accounts payable What potential errors or fraud can be identified by each analytical procedure?
Describe assertions and test of details of accounts payable balances? 10 Describe assertions and test of details of accounts receivable balances?
11 Describe the transactions and events assertions and test of details that the auditor could use for Authorization and Classification assertions of PPE?
12 Describe the procedures the auditor should perform during the count of the entity’s physical inventory
Trang 215 Describe the assertions for long-term liabilities balances Discuss some example tests of controls that the auditor could use for Right & Obligation and Valuation assertions
16 Describe the transactions and events assertions for payroll Discuss some example
tests of controls that the auditor could use for Occurrence and Authorization
assertions
17.What control activities can a client use to prevent unauthorized inventory production? What tests of controls are performed for this assertion?
18 What procedures would an auditor use to verify the completeness, rights and obligations, and valuation assertions for property, plant, and equipment?
19 What procedures would an auditor use to verify the completeness, rights and obligations, and valuation assertions for inventory?
20 What procedures would an auditor use to verify the completeness, rights and
obligations, and valuation assertions for long-term liabilities?
21 Describe the transactions and events assertions for revenue Discuss some example
tests of details that the auditor could use for Occurrence and Completeness
assertions
22 Describe the transactions and events assertions for revenue Discuss some example
tests of details that the auditor could use for Authorization, Accuracy assertions 23.Describe the transactions and events assertions for cash receipt Discuss some
example tests of details that the auditor could use for Completeness and Classification assertions
24 Describe the transactions and events assertions for cash receipt Discuss some example tests of details that the auditor could use for Accuracy and Occurrence assertions
25 Describe the transactions and events assertions for property, plant and equipment
Discuss some example tests of details that the auditor could use for Accuracy and Occurrence assertions
II- NHÓM CÂU HỎI 2 (3 điểm)
| An auditor should perform alternative procedures to substantiate the existence of accounts receivable when
a No reply to a negative confirmation request is received b No reply to a positive confirmation request is received c The collectability of the receivables is in doubt
d Pledging of the receivables is probable
2 Inventory is a complex area to audit for all but which of the following reasons?
a There are several acceptable valuation methods and some entities use different methods for different types of inventory
b Inventory is often in different locations
Trang 33 Which of the following is a control that generally is established over cash receipts? a To insure accurate posting, the accounts receivable clerk should post the customers' receipts from customers’ checks
b To prevent abstraction of cash, a control listing of cash receipts should be prepared by
mailroom personnel
c To insure accuracy of the accounts receivable records, the records should be reconciled monthly to the accounts receivable controlling account
d To prevent theft of cash, receipts should be deposited daily
4 The auditor should ordinarily send confirmation requests to all banks with which the client has conducted any business during the year, regardless of the year-end balance, because
a The confirmation form also seeks information about indebtedness to the bank b This procedure will detect kiting activities that would otherwise not be detected c The sending of confirmation requests to all such banks is required by auditing Standards
d This procedure relieves the auditor of any responsibility with respect to non-detection of forged checks
5 Normally it may be unnecessary to examine supporting documentation for each addition to property, plant, and equipment, but it would be customary to verify:
a All unusual transactions
b All large transactions
c A representative sample of typical additions d All three of the above
6 Which of the following is a customary audit procedure for the verification of the legal ownership of real property?
a Examination of corporate minutes and resolutions concerning the approval to acquire property, plant, and equipment
b Examination of ownership documents registered and on file at a public hall of records c Examination of correspondence with the corporate counsel concerning acquisition matters
d Examination of deeds and title guaranty policies on hand
7 An auditor compares the current year revenues and expenses with those of the prior year and investigates all changes exceeding 5 percent By this procedure, the auditor
would be most likely to learn that
a the entity changed its capitalization policy for small tools in the current year b fourth quarter payroll taxes in the current year were not paid
Trang 4d the current year provision for uncollectible accounts is inadequate because of worsening economic conditions
8 Which of the following comparisons would be most useful to an auditor in evaluating the overall financial results of an entity's operations?
a current year revenue to budgeted current year revenue
b prior year payroll expense to budgeted current year payroll expense ¢ prior year accounts payable to current year accounts payable
d current year warranty expense to current year contingent liabilities
II - NHÓM CÂU HỎI 3 (4 điểm)
1 Items present various internal control strengths or internal control deficiencies a Cash receipts received in the mail are forwarded unopened with remittance advices
to accounting
b Once shipment occurs and is recorded in the sales journal, all shipping documents are marked “recorded” by the accounting staff
c Credit is granted by a credit department Required:
a For each of the preceding items, indicate whether the item represents an: - Internal control strength for the sales and collection cycle
- Internal control deficiency for the sales and collection cycle
b For each item that you answered (a), show the transaction-related audit objective(s) to which the control relates
c For each item that you answered (b), indicate the nature of the deficiency (If happened) 2 An online retailer (Rom.com) is of college and professional sports team memorabilia, such as hats, shirts, pennants, and other sports logo products Consumers select the college or professional team from a pull-down menu on the company’s Web site For each listed team, the Web site provides a product description, picture, and price for all products sold online Customers click on the product number of the items they wish to purchase The following are internal controls Rom.com has established for its online sales:
1 The online sales system is linked to the perpetual inventory system that verifies quantities on hand before processing the sale
2 Only products shown on the Web site can be purchased online Other company products not shown on the Web site listing are unavailable for online sale
3 Before the sale is authorized, Rom.com obtains credit card authorization codes electronically from the credit card agency
Required:
Trang 5b For each control, describe potential financial misstatements that could occur if the control was not present
4 The following misstatements are included in the accounting records of Leminho
Manufacturing Company
| Each month, a fraudulent receiving report is submitted to accounting by an employee
in the receiving department A few days later, he sends Westgate an invoice for the quantity of goods ordered from a small company he owns and operates in the evening A check is prepared, and the amount is paid when the receiving report and the vendor’s
invoice are matched by the accounts payable clerk
2 Acquisitions of raw materials are often not recorded until several weeks after the goods are received because receiving personnel fail to forward receiving reports to accounting
When pressure from a vendor’s credit department is put on Westgate’s accounting
department, it searches for the receiving report, records the transactions in the acquisitions journal, and pays the bill
Required:
a For each misstatement, identify the transaction-related audit objective that was not met
b For each misstatement, state a control that should have prevented it from occurring on a continuing basis
c For each misstatement, state a substantive audit procedure that could uncover it
5 You are an audit manager in Fini & Co One of your audit clients, Mis Co, is a specialist supplier of crime fiction with 120,000 customers The company owns one large
warehouse, which contains at any one time about | million books of up to 80,000 different titles Customers place orders for books either over the Internet or by mail order Books are dispatched on the day of receipt of the order Returns are allowed up to 30
days from the dispatch date provided the books look new and unread
Due to the high inventory turnover, Mis maintains a perpetual inventory system
using standard “off the shelf” software Fini & Co has audited the system for the last five years and has found no errors within the software
Continuous inventory checking is carried out by Mis's internal audit department
You are currently reviewing the continuous inventory checking system with an
audit junior The junior needs experience in auditing continuous inventory checking systems and some basic knowledge on ACCA's Code of Ethics and Conduct
Required: During your preliminary audit planning you note that the engagement
letter has been returned un-signed by the directors of Mis When asked to explain their action, the directors indicate that they cannot allow you access to information on the company's new website development as this contains various trade secrets You will not, therefore, be able to perform audit procedures on the research and development expenditure included on the website and included in non-current assets
Briefly explain the actions you should take as a result of the directors not signing the engagement letter
Trang 6I For 20 nontangible acquisitions, select a sample of line items from the acquisitions journal and trace each to related vendors’ invoices Examine whether each transaction appears to be a legitimate expenditure for the client and that each was approved and recorded at the correct amount and date in the journal and charged to the correct account per the chart of accounts
De Refoot the acquisitions journal for | month and trace all totals to the general ledger
3 Send letters to several vendors, including a few for which the recorded accounts
payable balance is zero, requesting them to inform us of their balance due from Cooley Ask the controller to sign the letter
4 Examine a sample of receiving report numbers and determine whether each one
has an initial indicating that it was recorded as an account payable
Required:
a For each procedure, identify the type of evidence being used
b For each procedure, identify whether it is an analytical procedure, a test of control, a substantive test of transactions, or a test of details of balances
c For each test of control or substantive test of transactions, identify the transaction- related audit objective(s) being met
7 The following are misstatements that might be found in the client’s year-end cash
balance (assume that the balance sheet date is June 30):
1 The outstanding checks on the June 30 bank reconciliation were underfooted by $3,000
2 A loan from the bank on June 25 was credited directly to the client’s bank account The loan was not entered as of June 30
3 A check was omitted from the outstanding check list on the June 30 bank
reconciliation It cleared the bank July 14
Required:
| Assuming that each of these misstatements was intentional (fraud), state the most
likely motivation of the person responsible