In which of the following circumstances would the use of the negative form of accounts receivable confirmation most likely be justified? A small number of accounts may be in dispute, and the accounts receivable balance arises from sales to many customers with small balances. More nonresponses are likely to occur.
When accounts receivable are confirmed at an interim date the auditors are not concerned with which of the following?
21. When accounts receivable are confirmed at an interim date, auditors need not be concerned with: Considering the necessity for some additional confirmations as of the balance sheet date if balances have increased materially. Obtaining a summary of receivables transactions from the interim date to the year-end date.
Which of the following is not normally considered a step in the credit sales functions?
1: Which of the following is not normally considered a step in the credit sales functions? Answer: acquiring goods to fill the order Q.
Which of the following best describes the primary purpose of audit procedures?
The main purpose of audit programme is that every material area has been audited appropriately and sufficient appropriate audit evidence has been obtained in respect of every important areas of audit.
What evidence is appropriate to determine recorded purchase transactions?
What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices? Receiving reports and purchase orders.
Are bank confirmations required for an audit?
Bank confirmations are not required under US auditing standards. However, confirmations of accounts receivables are required by US auditing standards. According to PCAOB standard AU Section 330, confirmation of accounts receivable is a generally accepted auditing procedure.
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.
Which document or record is used in the write off of uncollectible accounts classes of transactions?
A credit memo is a document used internally that indicates authority to write-off an account receivable as uncollectible. If a company uses a periodic inventory system, the shipping records are used to update the inventory quantities. The sales journal is generated from the sales transaction file.
What is the primary purpose of audit documentation?
It provides evidence of the auditor’s basis for a conclusion about the achievement of the overall objective. It provides evidence that the audit was planned and performed in accordance with ISAs and other legal and regulatory requirements. It assists the engagement team to plan and perform the audit.
What makes a small number of accounts in dispute?
C) A small number of accounts may be in dispute and the accounts receivable balance arises from sales to a few major customers. D) A small number of accounts may be in dispute and the accounts receivable balance arises from sales to many customers with small balances.
How are cash receipts from sales on account misappropriated?
Cash receipts from sales on account have been misappropriated. Which of the following acts would conceal this defalcation and be least likely to be detected by an auditor? Understating the sales journal.
How to disclose alternative procedures for accounts receivable?
B) disclose in the opinion paragraph that confirmation of accounts receivable was impracticable. C) avoid mentioning the alternative procedures. D) include an explanatory paragraph that discloses the performance of alternative procedures.
How is aged trial balance of recorded accounts receivable determined?
A) Analyze the aged trial balance of recorded accounts receivable. B) Confirm recorded accounts receivable. C) Trace a sample of shipping documents to sales invoices recorded in the sales journal. D) Vouch a sample of recorded sales from the sales journal to shipping documents.
