Audit Exam 3 Review
Quiz
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Business
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University
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Hard
Mary Templeton
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15 questions
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1.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
When performing confirmation of cash balances with a bank, the auditor is primarily gathering evidence related to which financial statement assertion?
Existence
Completeness
Valuation
Presentation
2.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
Immediately upon receipt of cash, a responsible employee should
Record the amount in the cash receipts journal.
Update the subsidiary accounts receivable records.
Prepare a control listing of incoming cash receipts
Prepare a deposit slip in triplicate.
3.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
Which of the following control activities would best protect against the preparation of improper or inaccurate cash disbursements?
All checks must be sequentially numbered and accounted for by internal auditors.
All signed checks must be reviewed and compared with supporting documentation by the treasurer before mailing.
All checks must be signed by an officer designated by the board of directors.
All checks must be perforated or otherwise effectively canceled when they are returned with the bank statement.
4.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
Which of the following is least indicative of fraudulent activity?
Bank reconciliation has no outstanding checks or deposits older than 15 days.
Internal auditors cannot locate several credit memos to support reductions of customers’ balances.
Three people were absent the day the auditors handed out the paychecks and have not picked them up four weeks later.
Numerous cash refunds have been made to different people at the same post office box address.
5.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
An audit team is auditing sales transactions. One step is to vouch a sample of debit entries from the accounts receivable subsidiary ledger back to the supporting sales invoices. The purpose of this audit procedure is to establish that:
Sales invoices represent bona fide sales.
All sales have been recorded.
Entries in the accounts receivable subsidiary ledger were properly invoiced.
All sales invoices have been properly posted to customer accounts.
6.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
A client has a separate sales group for its largest “preferred” customers, a select group of customers who normally make purchases in excess of $250,000 and often have accounts receivable balances in excess of $1 million. Which of the following audit procedures would the auditor most likely perform?
Send out negative confirmations on a large sample of these customers.
Send out positive confirmations on a large sample of these customers.
Inquire of the sales manager regarding the accounts receivable terms.
Prepare a schedule of purchases and payments for these customers.
7.
MULTIPLE CHOICE QUESTION
20 sec • 1 pt
In the audit of accounts receivable, the most important emphasis should be on the
Existence assertion.
Presentation and disclosure assertion.
Completeness assertion.
Rights and obligations assertion.
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