ACA 312A Practice Test

Which of the following might be detected by sales cutoff tests

• Understated receivables
• Overstated sales
• Kiting
• Misappropriated Inventory

The accounts payable department receives a purchase order form to accomplish all of the following, except

• Comparing invoice to price to purchase order price
• Ensuring that the purchase has been properly authorize
• Ensuring that the goods have been received by the party, requesting the goods
• Comparing quantity ordered to quantity purchase

Omitting quantities from copies of purchase orders sent to the receiving department is a control procedure intended mainly to

• Ensure that goods received are physically counted by receiving department personnel.
• Identify and return damaged goods as soon as they are received.
• Provide a crosscheck for verifying the accuracy of perpetual inventory records.
• Prevent theft of goods by receiving department personnel.

In performing an audit on the existence of inventory contained in a warehouse, an auditor is primarily concerned with

• Observing and testing the number of units on hand
• Determining if the value of the inventory is reasonable.
• Identifying the ownership of the inventory
• Locating slow moving items contained in inventory

When verifying dividend amount paid and auditor will typically do all, except which of the following

• determine dates and amounts of dividend pages.
• Send confirmations to shareholders to verify payments.
• Examine arrearages of preferred stock dividends
• examine treatment of dividends.

During an audit of a non-public entity, which of the following is primarily an overall audit, approach to audit plant, assets and equipment, continuing by a continuing auditor

• Analysis and inquiry
• Direct test of year and balances
• Test of controls
• Test of transactions during the year

An auditor primary concern when performing test of controls over purchasing is to determine whether

• Purchases are properly authorize
• Purchases are properly recorded
• Purchase orders agreed to purchase requisition
• Purchasing personnel, are performing their assigned functions properly

Ordinary are auditors, more concerned with an under or overstatement of ending inventory and why

• Overstatement, because net income would be overstated also
• Understatement because net income would be overstated
• Overstatement, because this would indicate that liabilities are likely to be understated
• Understatement because this would indicate that liabilities are likely to be understated

Working papers, ordinarily would not include

• Initials of the in charge auditor, indicating our review of the staff assistance work
• Cut off bank statements received directly from the bank
• A memo describing the preliminary review of the internal control structure
• Copies of the client's inventory count sheets Copies of the clients inventory, count sheets

Which of the following is the legitimate reason why a responsible party would have difficulty estimating environmental cleanup costs Which of the following is the legitimate reason why a responsible party would have difficulty estimating environmental, cleanup costs

• Possible as yet unknown contamination
• Possible future legislation
• Possible insurance recovery
• Possible re-existing contamination