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ACC 492 Education Specialist
ACC 492 Education Specialist
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ACC 492 Week 1 Current Issue Summary Behind the Numbers Insights
into Large Audit Firm Sampling Policies
(2019 Syllabus)
ACC 492 Week 2 Current Issue Summary Failing to Find Fraud When
Auditing Cash (2019 Syllabus)
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1. Which of the following tests are typically not necessary when auditing
a client’s schedule of recorded disposals?
Manufacturing systems
I and II
I and III
II and III
I, II and III
4. Auditors are especially concerned with three aspects of internal
control for the sales and collection cycle. Which of the following is not
one of their major concerns?
Common stock
The more effective the internal control system, the more assurance it
provides the auditor about the reliability of financial reporting by the
client.
voucher.
purchase requisition.
purchase order.
receiving report.
attributes sample.
variables sample.
representative sample.
Recognizing liabilities
Recognizing liabilities
12. When the auditor decides to select less than 100 percent of the
population for testing, the auditor is said to use:
audit sampling.
poor judgment.
estimation sampling.
representative sampling.
13. The ________ is a contract between a carrier (e.g., a trucking
company) and the seller of goods that dictates the details surrounding the
shipment of goods.
sales invoice
remittance advice
picking ticket
bill of lading
The decision of how many items to test must be made by the auditor for
each audit procedure.
The decision of how many items to test should not be influenced by the
increased costs of performing the additional tests.
The sample size for any given procedure is likely to vary from audit to
audit.
It is possible to vary the sample size from one unit to 100% of the items
in the population.
16. Which of the following is not one of the business functions for the
payroll and personnel cycle?
Payment of payroll
True
False
18. The audit procedure that requires an auditor to “foot the acquisition
schedule” relates to which balance-related audit objective?
Classification
Detail tie-in
Existence
Cut-off
Tolerable misstatement
20. Because cash is the most desirable asset for people to steal, it has a
higher:
liquidity risk.
detection risk.
control risk.
inherent risk.
21. The two primary classes of transactions in the sales and collection
cycle are:
storeroom documents
Depreciation expense
Insurance expense
During letters
25. The word below that best explains the relationship between required
sample size and the acceptable risk of incorrect acceptance is:
Inverse.
Direct.
Proportional.
Indeterminate.
Existence
Cutoff
Detail tie-in
27. The final step in the evaluation of the audit results is the decision to:
28. The computer file used for recording payroll transactions for each
employee and maintaining total wages paid for the year to date is the:
30. Which of the following groups has the responsibility for identifying
and deciding the appropriate accounting treatment for recording or
disclosing contingent liabilities?
Management and the auditors
Management
Legal counsel
Auditors
31. The standard unqualified audit report for a non-public entity must:
Be dated.
Effectiveness basis.
33. You are auditing Rodgers and Company. You are aware of a
potential loss due to non-compliance with environmental regulations.
Management has assessed that there is a 40% chance that a $10M
payment could result from the non-compliance. The appropriate
financial statement treatment is to:
Since there is greater that a remote chance of occurrence, accrue the $10
million
34. Auditors seldom learn about the capital acquisition and repayment
cycle when gaining an understanding of the client’s business and
industry.
True
False
35. The total of the individual employee earnings in the payroll master
file should equal the total:
gross payroll plus the total contributed by the employer for payroll taxes.
True
False
direct deposit
funds transfer
lockbox
interbank transfer
True
False
Granting credit
the client’s bank loans with due date, interest rate, and collateral
requested.
45. Which of the following audit procedures would be the most correct
in determining the audit objective of existence for the equipment
account in the fixed asset master file?
Examine vendor invoices and receiving reports.
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3.A check was omitted from the outstanding check list on the June 30
bank reconciliation. It cleared the bank July 7.
4.A check was omitted from the outstanding check list on the bank
reconciliation. It cleared the bank September 6.
7.A check that was dated June 26 and disbursed in June was not
recorded in the cash disbursements journal, but it was included as an
outstanding check on June 30.
Required
b.What control can be instituted for each fraud to reduce the likelihood
of occurrence?
7. Reconcile the recorded cash receipts on the prelisting with the cash
receipts journal and the bank statement for a 1-month period.
Required
c. Identify the type of evidence used for each audit procedure, such as
inspection and observation.