Auditing & Assurance Services 7th Edition by Timothy Louwers Test bank

D.  operational auditing.  

54.

The accounting, auditing, and investigating agency of the U.S. Congress, headed by the U.S. Comptroller General is known as      A.  the Federal Bureau of Investigation (FBI).   B.  the U.S. General Accountability Office (GAO).   C.  the Internal Revenue Service (IRS).   D.  the United States Legislative Auditors (USLA).

 
 

Short Answer Questions
 

55.

Which of the PCAOB assertions (A-E) are best verified by the following audit procedures (1-4)? A. Existence or occurrence B. Rights and obligations C. Valuation or allocation D. Completeness E. Presentation and disclosure 1. Confirming inventory held on consignment by the client with independent third party. 2. Consulting the Wall Street Journal for year-end prices of securities held by the client. 3. Physically examine all major property and equipment additions. 4. Review the aged trial balance for significant past due accounts.

 

56.

ABC Company had a major sale to XYZ Company. This sale accounted for 20% of the revenue of ABC Company. The auditors performed the audit procedures listed 1-3. For each audit procedure select the ASB transaction assertion that is most likely being tested. A. Occurrence B. Completeness C. Cutoff D. Accuracy E. Classification 1. The auditor reviewed the shipping documents to check the date that product was shipped to XYZ Company. 2. The auditor reviewed the shipping documents to ensure that all product included in the sales revenue to XYZ had been shipped. 3. The auditor reviewed the invoice sent to XYZ Company to ensure that XYZ had been properly billed.

 

57.

Auditors are auditing the warehouse of Huge Lots Corporation. The auditors performed the audit procedures listed 1-5. For each audit procedure select the ASB balance assertion that is most likely being tested. A. Existence B. Rights and obligations C. Completeness D. Accuracy E. Valuation 1. The auditors walked through the warehouse looking for obsolete inventory. 2. The auditors compared invoices received from suppliers with the cost of inventory listed in the inventory accounts. 3. The auditors reviewed purchase orders to determine if any inventory was on consignment. 4. The auditors reviewed vendor invoices to determine if freight costs, taxes, tariffs or other costs had been included in inventory costs. 5. The auditors selected items from the inventory and reviewed inventory records to ensure these items were included in those records.