What are three tasks of the fixed asset system?
6-11 is a data flow diagram of a fixed asset system. It focuses attention on the three tasks of asset acquisition, asset maintenance, and asset disposal.
Which transaction is not processed in the fixed assets system?
Fixed Asset Transactions: Purchase of raw materials is the transactions relating operations in company and it is acquired for resale or for the purpose of manufacture of final product. Since the transactions do not relate to fixed assets they are not recorded in fixed asset system.
Which one of the following are fixed asset system tasks?
the 3 categories of tasks in the fixed asset system are acquisition, depreciation, and disposal. although a major task in the asset maintenance category is calculating and expensing depreciation, it also involves adjusting asset accounts to reflect physical improvements and keeping track of the location of each asset.
Which one of the following functions is responsible for submitting employee pay rate changes?
Which one of the following functions is responsible for submitting employee pay rate changes? Personnel Wage Rate Change: The department responsible for rate change is the personnel department that looks into the administration of the manpower.
Which statement below best describes a profit center?
Which statement below best describes a profit center? Profit center: A profit center authorizes to make decisions on the most significant operations cost, including power to choose its market and source of supply. Hence, the correct option is a. Chapter 8, Problem 2MCQ is solved.
Which function should distribute paychecks?
Which function should distribute paychecks? Correct option is c. Justification: Paymaster distributes the check: Paymaster is the individual key who is independent in the payroll department that distributes the check; hence the possibility of fraud can be avoided due to segregation of responsibilities.
What documents are included in the audit trail for payroll?
What Is an Audit Trail?
- invoices,
- receipts,
- purchase orders,
- expense reports,
- cancelled checks, and.
- correspondence confirming an event or activity.
Which document typically triggers the three way match?
Supplier’s invoice
Which of the following situations represents an internal control weakness in the payroll department?
Which one of the following situations represents an internal control weakness in the payroll department? Answer (B) is correct. Paychecks should not be distributed by supervisors because an unscrupulous person could terminate an employee and fail to report the termination.
What is the advantage of a payroll computer system?
With an electronic payroll system, you can forget about time and human error. Payroll software takes your timekeeping data and calculates your crew’s time and paychecks automatically. Whether you pay by the minute or by the quarter-hour, a digital system takes care of turning time into money.
What are the two major balance related audit objectives in testing payroll liabilities?
The two major balance-related audit objectives in testing payroll liabilities are: Accruals in the trial balance are stated at the correct amounts (accuracy). Transactions in the payroll and personnel cycle are recorded in the proper period (cutoff).
Which of the following is not a major risk in the payroll cycle?
Which of the following is NOT a major risk in the payroll cycle? Paying fictitious employees.
What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices?
select vendor accounts based on the number of purchases from vendors during the year. What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices? Receiving reports and purchase orders.
When would an auditor most likely extend substantive tests of payroll?
Question: An Auditor Most Likely Would Extend Substantive Tests Of Payroll When: Multiple Choice Payroll Is Extensively Audited By The State Government. Payroll Expense Is Substantially Higher Than In The Prior Year Due To Company Growth. Overpayments Are Discovered In Performing Tests Of Details.
Which of the following departments most likely would approve changes in pay rates and deductions from employee salaries?
personnel department
Which of the following procedures is best for identifying unrecorded trade accounts payable?
Which of the following audit procedures is best for identifying unrecorded trade accounts payable? Reviewing cash disbursements recorded subsequent to the balance sheet date to determine whether the related payable applies to the prior period.
Which of the following is an analytical procedure that should be applied to the income statement?
Which of the following is an analytical procedure that should be applied to the income statement? Compare the actual revenues and expenses with the corresponding figures of the previous year and investigate significant differences. Select sales and expense items and trace amounts to related supporting documents.
When companies design and implement internal controls?
When a company designs and implements internal controls, cost of the controls is not a valid consideration. Reasonable assurance allows for: A) low likelihood that material misstatements will not be prevented or detected by internal controls.
When assessing whether the financial statements are auditable the auditor must consider?
When assessing whether the financial statements are auditable, the auditor must consider: A) that the integrity of management and the adequacy of accounting records are the two primary factors determining auditability.
Which of the following is least likely to be performed before the balance sheet date?
Observation of inventory. Review of internal accounting control over cash disbursements. Because a significant portion of the search for unrecorded liabilities deals with transactions recorded after year-end, it is least likely to be completed before the balance sheet date.
Which assertion has the greatest emphasis when auditing accounts payable?
The auditor’s primary concern with accounts payable is that of existence.
Which of the following procedures would an auditor most likely perform before the balance sheet?
Which of the following procedures would an auditor most likely perform prior to the balance sheet date? Auditing significant travel and entertainment expenses can be performed at an interim period, applying procedures to transactions occurring between the testing and the end of the period, as appropriate.
Which of the following procedures is the most efficient in detecting unrecorded liabilities at the balance sheet date?
C. The confirmation of accounts payable selected from the year-end trial balance of such accounts is most effective in discovering unrecorded liabilities. D. Unrecorded payables are often discovered through examining vouchers payable entered into the voucher register prior to the balance sheet date.
Would an auditor normally confirm the accounts payables?
It is not normal that auditors perform account payable confirmation to suppliers. In most case, auditors perform bank and account receivable confirmation.
What auditing steps should the auditor perform if there is no response to a second request for a positive confirmation?
When the auditor has not received replies to positive confirmation requests, he or she should apply alternative procedures to the nonresponses to obtain the evidence necessary to reduce audit risk to an acceptably low level.
What to look for when auditing accounts payable?
Despite these differences, auditors will generally look for completeness, validity, and compliance of records, and see if the accounts payable balance was properly disclosed on the end-of-year statement. Together, these confirm whether the company’s records actually do present an accurate view of the business.
How do auditors confirm their clients bank balance?
Normally, during the interim audit, auditors review the banks balance and select some important accounts to be confirmed. Auditors draft the confirmation and the send to client review and get the confirmation signed. Once the confirmation signed, auditors is the one who proceeds the confirmation to banks.