Failure to document a liability usually results in an understatement of current ratio an understatement that profit. An overstatement of heritage An overstatement the profit


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Which the the following is not a significant control risk in the payroll cycle?A. Losing employees come competitorsB. Payment fictitious "employees."C. Incorrect bookkeeping for costs or expenses.D. Overpaying for time or production
Which of the following client control activities is not normally performed in the vouchers payable (accounts payable) department?A. Checking the prices on the vendor"s invoiceB. Creating checks for the treasurer"s signature come take benefit of acquisition discountsC. Identify the mathematics accuracy the the vendors" invoicesD. Regulating the e-mail of the check and also remittance advice
Which that the adhering to accounts would certainly most likely be the review by the auditor to gain reasonable assurance that enhancements to the tools account space not understated?A. Repairs and also maintenance expenseB. Account payableC. Depreciation expenseD. Obtain on handle of equipment
A. To compare cash payments developing after the balance sheet date with the accounts payable attempt balance
Which that the complying with procedures would an auditor most most likely perform in in search of unrecorded payables?A. Compare cash payments arising after the balance sheet date with the accounts payable psychological balanceB. Contrast the proportion of accounts payable to purchases with the former year"s ratioC. Mediate receiving reports with associated cash payments made simply prior to year-end.D. Warranty a sample that creditor balances to sustaining invoices, receiving reports, and also purchase orders
An auditor wishes to perform tests of controls top top a client"s purchase procedures. If the control tasks leave no audit trace of documentary evidence, the auditor most most likely will test the steps byA. Observation and also inquiryB. Confirmation and observationC. Analysis procedures and also confirmationD. Inquiry and also analytical procedures
Cutoff test designed come detect purchases made before the finish of the year that have actually been tape-recorded in the subsequent year most most likely would carry out assurance about management"s assertion ofValuation or allocationRights and obligationsExistence or occurrenceCompleteness
When auditing PP&E, the auditor"s strategy is typically toA. Concentrate on finding unrecorded assetsB. Examine proof supporting additions during the yearC. Follow a reliance strategy, experimentation internal controls and analytical proceduresD. Examine proof supporting the amounts in the finishing balance
A. Warranty a sample the cash disbursements recorded just after year-end to receiving reports and vendor invoices.
Which that the adhering to procedures would an auditor most likely perform in in search of unrecorded liabilities?A. Warranty a sample of cash disbursements recorded just after year-end to receiving reports and merchant invoices.B. Scan the cash disbursements entries tape-recorded just prior to year-end because that indications of unexplained transactionsC. Compare a sample of purchase orders issued just after year-end v the year-end account payable trial balance.D. Map a sample of accounts payable entries tape-recorded just prior to year-end come the unequaled receiving report file.
Improperly capitalizing an price item results inA. Understatement of benefit in the current year and in future yearsB. Understatement of profit in the current year and overstatement in future yearsC. Overstatement of benefit in the present year and also in future yearsD. Overstatement of benefit in the existing year and also understatement in future years
Which that the following price accounts would certainly not usually be experiment by listing every debits and examining any far-reaching items?A. Repairs and also maintenanceB. Various expenseC. Legit expenseD. Payroll expense
Which that the following would be an indicator that potential fraud?A. Photocopies of invoices in the voucher file.B. Seller invoices in number orderC. Merchants with only short article office box addressesD. All of the over indicate potential fraud
Small Corporation offers a earnings Clearing Account for its payroll disbursements. At the end of February, a reasonably big debit balance continued to be in this account. The most likely reason for this is thatA. An ext labor expense had been assigned to the price accounts than had been paidB. Some employees had not however cashed your checksC. Some labor price had not been effectively classified in the expense accountsD. Not enough cash had been moved to the bank account
The purpose of segregating the duties of hiring personnel and distributing payroll checks is to different theA. Operational duty from the record keeping responsibilityB. Person resources role from the controllership functionC. Bureaucratic controls native the internal bookkeeping controlsD. Authorization the transactions from the custody of connected assets
Which of the following would not overstate current duration net income? Capitalizing one expenditure that should be expensed Failing to document a liability for an expenditureFailing to record a examine paying an item in Vouchers Payable every one of the above would overstate net income
Computer controls that could be found in an progressed on-line acquisition and also expenditure system would not includeA. All vendor invoices room pre-numbered and the number accounted forB. The inspect signature is published using a signature plate that is set up on the computer printer only when checks room printedC. An identification number and also password are compelled to go into the non automatic acquisition orders.D. Every terminal performs only designated functions
A client"s physical count of inventories was greater than the inventory quantities presented in the perpetual records. This case could it is in the an outcome of the failure to recordA. Purchase discountsB. SalesC. Sales discountsD. Purchases
An auditor selected one inventory items on the warehouse floor; check counted it, and traced the counting to the final inventory compilation. The auditor most most likely was testing the complying with PCAOB assertion: visibility Rights and also obligations Completeness Valuation
Your client plans to count inventory at several areas on the very same day. No ar is product in amount, however the full of list is fairly material. How is one auditor most likely to setup his/her observation?A. Work-related with the customer to identify which places to observeB. Urge the inventory it is in counted on different days for this reason the auditor deserve to be current at all locations.C. Watch a sample of areas on a surprised basisD. Observe all counts at all locations by using the required variety of auditors
Which that the following steps would certainly not usually be contained in a routine for a physical inventory observation?A. Vouch unit prices to vendors" invoices or other price recordsB. Obtain variety of last five receiving reports and also last five shipping documentsC. Inspect tags used and unused and also record tag numbers usedD. Achieve client"s inventory counting instructions and review because that completeness
An auditor most likely would make inquiries of production and sales personnel concerning possible obsolete or slow-moving list to assistance management"s financial statement assertion (PCAOB assertion) ofA. Existence or occurrenceB. Presentation and also disclosureC. Valuation or allocationD. Rights and obligations
An auditor will certainly usually map the details the the test counts made throughout the monitoring of physics inventory counts to a last inventory compilation. This audit procedure is undertaken to carry out evidence the items physical present and observed through the auditor at the time of the physics inventory counting areA. Physically present at the moment of the preparation of the final inventory schedule.B. Own by the clientC. Not obsoleteD. Consisted of in the final inventory schedule
Which that the complying with would no be included in the supporting records for a voucher? Receiving report empty check purchase order vendor invoice
A cutoff test reveals products received and counted in inventory however not videotaped in purchases. The result on the gaue won statements isA. Net earnings is overstatedB. Over there is no effect because the inventory records were adjusted to the physics countC. Net earnings is understatedD. Net earnings is not influenced until the subsequent period
An auditor most likely would analyze inventory turnover rates to acquire evidence worrying relevant assertions around A. ExistenceB. Rights and also obligationsC. Valuation and allocationD. Classification and also understand
The authority to accept incoming items in receiving have to be based on a(n)Correct prize approved acquisition ordermaterials requisition invoice of lading merchant invoice
A large retail enterprise has established a policy that requires the paymaster to supply all unclaimed payroll check to the internal audit room at the end of each payroll distribution day. This plan was most likely embraced to ensure the employees that were missing on a payroll distribution day are not paid for that day. Protect against the paymaster native cashing checks that are unclaimed for numerous weeks avoid a bona fide employee"s check from being declared by an additional employeedetect any kind of fictitious employee that may have been placed on the payroll.
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