· Question 1
2 out of 2 points
For most audits, a proper cash receipts cutoff is less important than the sales cutoff because the improper cutoff of cash:
· Question 2
2 out of 2 points
Because of its central role in auditing of accounts receivable, which of the following would normally be one of the first items tested?
· Question 3
2 out of 2 points
An auditor is performing a credit analysis of customers with balances over 60 days due. She is most likely obtaining evidence for which audit related objective?
· Question 4
2 out of 2 points
When designing tests of details of balances, an important point to remember is:
· Question 5
2 out of 2 points
The audit procedure that provides the auditor with the most appropriate evidence when performing test of details of balances for accounts receivable is:
· Question 6
2 out of 2 points
Confirmation of accounts receivable selected from the trial balance is the most common test of details of balances for the ________ of accounts receivable.
· Question 7
2 out of 2 points
Tests of which balance-related audit objective are normally performed first in an audit of the sales and collection?
· Question 8
2 out of 2 points
A type of positive confirmation known as a blank confirmation:
· Question 9
2 out of 2 points
The most important test of details of balances to determine the existence of recorded accounts receivable is:
· Question 10
2 out of 2 points
Which of the following is the principle “weakness” of using negative confirmations for your tests of details of balances for accounts receivable?
· Question 11
2 out of 2 points
Cutoff misstatements occur:
· Question 12
2 out of 2 points
When do most companies record sales returns and allowances?
· Question 13
2 out of 2 points
Which of the following most likely would be detected by a review of a client’s sales cutoff?
· Question 14
0 out of 2 points
The two primary classes of transactions in the sales and collection cycle are:
· Question 15
2 out of 2 points
Communication addressed to the debtor requesting him or her to confirm whether the balance as stated on the communication is correct or incorrect is a:
· Question 16
0 out of 2 points
When errors are found in a sample, auditors in practice generally make the assumption:
· Question 17
2 out of 2 points
Monetary unit sampling is not particularly effective at detecting:
· Question 18
2 out of 2 points
If the population is not considered acceptable, one step the auditor is likely to take is to:
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· Question 19
2 out of 2 points
The risk the auditor is willing to take of accepting a balance as correct when the true misstatement in the balance under audit is greater than the tolerable misstatement is:
· Question 20
2 out of 2 points
If an auditor concludes that internal controls are likely to be effective, the preliminary assessment of control risk can be reduced, leading to which of the following impacts on the acceptable risk of incorrect acceptance?
· Question 21
2 out of 2 points
While performing a substantive test of details during an audit, the auditor determined that the sample results supported the conclusion that the recorded account balance was not materially misstated. It was, in fact, materially misstated. This situation illustrates the risk of:
· Question 22
2 out of 2 points
You are auditing Nelson and Company and determined that the sample results support a conclusion that the account is materially misstated, when in fact it was not misstated. This illustrates the risk of:
· Question 23
2 out of 2 points
Which of the following is not a type of statistical method that provides results in dollar terms?
· Question 24
2 out of 2 points
The method used to measure the estimated total error amount in a population when there is both a recorded value and an audited value for each item in the sample is:
· Question 25
2 out of 2 points
One of the steps involved in planning the sample for the tests of details of balances is to:
· Question 26
2 out of 2 points
The auditor is concerned with the audited value rather than the error amount of each item in the sample when using:
· Question 27
2 out of 2 points
When the sample selection is done using probability proportional to size sample selection (PPS):
· Question 28
2 out of 2 points
When selecting a sample size for substantive tests of balances which factor, other factors being equal, would result in a larger sample?
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· Question 29
2 out of 2 points
If acceptable audit risk is increased, acceptable risk of incorrect acceptance should be:
· Question 30
2 out of 2 points
In monetary unit sampling, a sampling interval of 900 means that: