AUDITING CHAPTER 16 EXAM BANK SOLUTION MANUAL ALREADY PASSED
4 views 0 purchase
Course
AUDITING CHAPTER 16
Institution
AUDITING CHAPTER 16
AUDITING CHAPTER 16 EXAM BANK SOLUTION MANUAL ALREADY PASSED
As a result of analytical procedures, the auditor determines that the gross profit percentage has declined from 30% in the preceding year to 20% in the current year. The auditor should - Answers Consider the possibility of a misstatemen...
AUDITING CHAPTER 16 EXAM BANK SOLUTION MANUAL ALREADY PASSED
As a result of analytical procedures, the auditor determines that the gross profit percentage has
declined from 30% in the preceding year to 20% in the current year. The auditor should - Answers
Consider the possibility of a misstatement in the financial statements.
An auditor's preliminary analysis of accounts receivable turnover revealed the following rates over these
accounting periods: 2016 (4.3) 2015 (66.2) 2014 (7.3): Which of the following is the most likely cause of
the decrease in accounts receivable turnover? - Answers Liberalization of credit policy
After a CPA has determined that accounts receivable have increased as a result of slow collections in a
"tight money" environment, the CPA will be likely to - Answers expand tests of collectibility
Which of the following procedures will an auditor most likely perform for year-end accounts receivable
confirmations when the auditor did not receive replies to second requests? - Answers Inspect the
shipping records documenting the merchandise sold to the debtors.
The negative form of accounts receivable confirmation request is useful except when - Answers
Individual account balances are relatively large
The return of a positive confirmation of accounts receivable without an exception attests to the -
Answers accuracy of the receivable balance.
Which of the following will likely provide the most assurance concerning the accuracy balance-related
objective for accounts receivable? - Answers Vouch amounts in the subsidiary ledger to details on
shipping documents.
Which of the following audit procedures will best uncover an understatement of sales and accounts
receivable? - Answers Test a sample of sales transactions, selecting the sample from prenumbered
shipping documents.
The confirmation of customers' accounts receivable rarely provides reliable evidence about the
completeness assertion because - Answers customers may not be inclined to report understatement
errors in their accounts.
Which of the following is least likely to be a reasonable explanation for an increase in accounts
receivable turnover? - Answers Allowance of a new grace period for customer payments
An auditor who is auditing accounts receivable would least likely perform which of the following tests? -
Answers Select cash disbursements made shortly after year-end and examine the supporting
documentation such as receiving reports and vendor invoices.
The auditor sends out positive accounts receivable confirmations for a client. Assuming a second
confirmation is sent out to a major customer who still fails to respond, the auditor should: - Answers
Send out a third confirmation request and if no response, perform alternative procedures.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller TutorJosh. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
