Which of the following internal control activities most likely would ensure that all billed sales?
Which of the following controls most likely would help ensure that all credit sales transactions of an entity are recorded? The billing department supervisor matches prenumbered shipping documents with entries in the sales journal.
Which of the following controls most likely would assure that all billed sales are correctly posted to the accounts receivable ledger?
Which of the following internal control activities most likely would assure that all billed sales are correctly posted to the accounts receivable ledger? Daily sales summaries are compared with daily postings to the accounts receivable ledger.
Which of the following internal control procedures would most likely deter lapping of collections from customers?
Which of the following internal control activities most likely would deter lapping of collections from customers? Separation of duties between receiving cash and posting the accounts receivable ledger.
Which of the following would most likely be the result of ineffective internal control policies and procedures in the revenue cycle?
The most likely result of ineffective internal control policies and procedures in the revenue cycle is that: answer: shipments to customers were invoiced.
Which of the following controls is most effective in providing assurance that recorded purchases are free of material errors?
Which of the following controls is most effective in providing assurance that recorded purchases are free of material errors? Purchase orders, receiving reports, and vendors’ invoices are independently matched in preparing vouchers.
Which of the following is most likely to be detected by an auditors review of an entity’s sales cutoff?
Which of the following is most likely to be detected by an auditor’s review of an entity’s sales cutoff? Unrecorded sales for the year. The auditor cannot infer that all nonrespondents have verified their account information. The negative request form of accounts receivable confirmation is useful particularly when….
Which of the following procedures is most effective 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 a control procedure that is usually applied to accounts payable?
The form typically used to confirm accounts payable: Requires the vendor to indicate the amount of the payable. Which of the following is a control procedure that is usually applied to accounts payable? Reconciliation of vendor statements with accounts payable.
When confirming accounts payable The approach is most likely to be one of?
When confirming accounts payable, the approach is most likely to be one of: (1) Selecting the accounts with the largest balances at year-end, plus a sample of other accounts.
What procedure can an auditor use to determine whether notes payable on the notes payable schedule are properly classified?
34) A common test of details of balances procedure for notes payable is to examine duplicate copies of notes to determine whether notes were dated on or before the balance sheet date.
Which of the following is not disclosed in a bank reconciliation?
All of the following would not be uncovered by a bank reconciliation except for: payments on notes payable debited directly to the the bank account by the bank but not recorded on the books.
Why would an auditor confirm a note payable?
Confirmation letters are important because they provide an independent verification of your organization’s finances. If your accounts receivable shows that you owe money to a particular vendor, your auditor might send that vendor a confirmation letter asking them if that amount is accurate.
Which of the following is responsible for establishing a private company’s internal control?
| 1. | Which of the following is responsible for establishing a private company’s internal control? |
|---|---|
| c. Compliance with laws and regulations | |
| d. Assurance of elimination of business risk. | |
| 3. (Public) | The Public Company Accounting Oversight Board states that reasonable assurance allows a: |
Which of the following is used to provide internal control assurance?
To provide reasonable assurance that internal controls involved in the financial reporting process are effective, they are tested by the external auditor (the organization’s public accountants), who are required to opine on the internal controls of the company and the reliability of its financial reporting.
When two or more persons work together to circumvent internal control procedures?
Cards In This Set
| Front | Back |
|---|---|
| What are classifications of cash outflows regarding operating cash flows? | Payment on AccountPurchase of supplies Interest paid on bonds |
| When two or more people work together to circumvent internal control procedures and commit fraud this is known as? | Collusion |
Which of the following parties are responsible for the internal control process of an entity?
75 Cards in this Set
| Which of the following parties is responsible for establishing an entity’s internal controls? | Management. |
|---|---|
| Internal controls normally include procedures designed to provide reasonable assurance that | transactions are executed in accordance with management’s general or specific authorization. |
What are two internal controls?
Yes, generally speaking there are two types: preventive and detective controls. Both types of controls are essential to an effective internal control system.
What are the 14 steps of auditing?
The 14 Steps of Performing an Audit
- Receive vague audit assignment.
- Gather information about audit subject.
- Determine audit criteria.
- Break the universe into pieces.
- Identify inherent risks.
- Refine audit objective and sub-objectives.
- Identify controls and assess control risk.
- Choose methodologies.
What are the basic concepts of auditing?
The basic principles of auditing are confidentiality, integrity, objectivity, and independence, skills and competence, work performed by others, documentation, planning, audit evidence, accounting system and internal control, and audit reporting.
What are the basic principles of auditing?
Auditing – Basic Principles
- Planning. An Auditor should plan his work to complete his work efficiently and well within time.
- Honesty. An Auditor must have impartial attitude and should be free from any interest.
- Secrecy.
- Audit Evidence.
- Internal Control System.
- Skill and Competence.
- Work Done by Others.
- Working Papers.
What are the five principles of auditing?
The fundamental principles within the Code – integrity, objectivity, professional competence and due care, confidentiality and professional behavior – establish the standard of behavior expected of a professional accountant (PA) and it reflects the profession’s recognition of its public interest responsibility.
What is the most important part of an audit?
As previously mentioned, an audit also includes auditors gaining an understanding of an entity’s internal control as it relates to financial statement reporting. This is arguably the most important part of an audit and where many organizations can find a significant amount of value from having an audit conducted.
Why is audit important give reasons?
An audit is important as it provides credibility to a set of financial statements and gives the shareholders confidence that the accounts are true and fair. It can also help to improve a company’s internal controls and systems.