(a) What are long-term liabilities? Give two examples.
(b) What is a bond?
Click here for the solution: (a) What are long-term liabilities? Give two examples.
(b) What is a bond?
Showing posts with label examples. Show all posts
Showing posts with label examples. Show all posts
Sunday, September 20, 2015
Tuesday, September 8, 2015
The following are examples of documentation typically obtained by auditors
Auditing P 7-29 The following are examples of documentation typically obtained by auditors:
1. Vendors invoices
2. General ledgers
3. Bank statements
4. Cancelled payroll checks
5. Payroll time cards
6. Purchase requisitions
7. Receiving reports (documents prepared when merchandise is received)
8. Minutes of board of directors
9. Remittance advices
10. Signed W-4s (Employee's withholding exemption certificates)
11. Signed lease agreements
12. Duplicate copies of bills of lading
13. Subsidiary accounts receivable records
14. Cancelled notes payable
15. Duplicate sales invoices
16. Articles of incorporation
17. Title insurance policies for real estate
18. Notes receivable
Required:
a. Classify each of the preceding items according to type of documentation:(1) internal or (2) external.
b. Explain why external evidence is more reliable than internal evidence.
Click here for the solution: The following are examples of documentation typically obtained by auditors
1. Vendors invoices
2. General ledgers
3. Bank statements
4. Cancelled payroll checks
5. Payroll time cards
6. Purchase requisitions
7. Receiving reports (documents prepared when merchandise is received)
8. Minutes of board of directors
9. Remittance advices
10. Signed W-4s (Employee's withholding exemption certificates)
11. Signed lease agreements
12. Duplicate copies of bills of lading
13. Subsidiary accounts receivable records
14. Cancelled notes payable
15. Duplicate sales invoices
16. Articles of incorporation
17. Title insurance policies for real estate
18. Notes receivable
Required:
a. Classify each of the preceding items according to type of documentation:(1) internal or (2) external.
b. Explain why external evidence is more reliable than internal evidence.
Click here for the solution: The following are examples of documentation typically obtained by auditors
The following are examples of audit procedures
Auditing P 7-30 The following are examples of audit procedures:
1. Review the accounts receivable with the credit manager to evaluate their collectibility.
2. Stand by the payroll time clock to determine whether any employee "punches in" more than one time.
3. Count inventory items and record the amount in the audit files.
4. Obtain a letter from the clients attorney addressed to the CPA firm stating that the attorney is not aware of any existing lawsuits.
5. Extend the cost of inventory times the quantity on an inventory listing to test whether it is accurate.
6. Obtain a letter from an insurance company to the CPA firm stating the amount of the fire insurance coverage on buildings and equipment.
7. Examine an insurance policy stating the amount of the fire insurance coverage on buildings and equipment.
8. Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year.
9. Obtain information about internal control by requesting the client to fill out a questionnaire.
10. Trace the total on the cash disbursements journal to the general ledger.
11. Watch employees count inventory to determine whether company procedures are being followed.
12. Examine a piece of equipment to make sure that a major acquisition was actually received and is in operation.
13. Calculate the ratio of sales commission expense to sales as a test of sales commissions.
14. Examine corporate minutes to determine the authorization of the issue of bonds.
15. Obtain a letter from management stating that there are no unrecorded liabilities.
16. Review the total of repairs and maintenance for each month to determine whether any months total was unusually large.
17. Compare a duplicate sales invoice with the sales journal for customer name and amount.
18. Add the sales journal entries to determine whether they were correctly totaled.
19. Make a petty cash count to make sure that the amount of the petty cash fund is intact.
20. Obtain a written statement from a bank stating that the client has $15,671 on deposit and liabilities of $500,000 on a demand note.
Required:
Classify each of the preceding items according to the eight types of audit evidence:
1. physical examination 2. confirmation 3. documentation 4. analytical procedures 5. inquiries 6. recalculation 7. reperformance 8. Observation
Click here for the solution: The following are examples of audit procedures
1. Review the accounts receivable with the credit manager to evaluate their collectibility.
2. Stand by the payroll time clock to determine whether any employee "punches in" more than one time.
3. Count inventory items and record the amount in the audit files.
4. Obtain a letter from the clients attorney addressed to the CPA firm stating that the attorney is not aware of any existing lawsuits.
5. Extend the cost of inventory times the quantity on an inventory listing to test whether it is accurate.
6. Obtain a letter from an insurance company to the CPA firm stating the amount of the fire insurance coverage on buildings and equipment.
7. Examine an insurance policy stating the amount of the fire insurance coverage on buildings and equipment.
8. Calculate the ratio of cost of goods sold to sales as a test of overall reasonableness of gross margin relative to the preceding year.
9. Obtain information about internal control by requesting the client to fill out a questionnaire.
10. Trace the total on the cash disbursements journal to the general ledger.
11. Watch employees count inventory to determine whether company procedures are being followed.
12. Examine a piece of equipment to make sure that a major acquisition was actually received and is in operation.
13. Calculate the ratio of sales commission expense to sales as a test of sales commissions.
14. Examine corporate minutes to determine the authorization of the issue of bonds.
15. Obtain a letter from management stating that there are no unrecorded liabilities.
16. Review the total of repairs and maintenance for each month to determine whether any months total was unusually large.
17. Compare a duplicate sales invoice with the sales journal for customer name and amount.
18. Add the sales journal entries to determine whether they were correctly totaled.
19. Make a petty cash count to make sure that the amount of the petty cash fund is intact.
20. Obtain a written statement from a bank stating that the client has $15,671 on deposit and liabilities of $500,000 on a demand note.
Required:
Classify each of the preceding items according to the eight types of audit evidence:
1. physical examination 2. confirmation 3. documentation 4. analytical procedures 5. inquiries 6. recalculation 7. reperformance 8. Observation
Click here for the solution: The following are examples of audit procedures
Sunday, September 6, 2015
List two examples of audit evidence the auditor can use in support of each of the following
Auditing P 7-31
List two examples of audit evidence the auditor can use in support of each of the following:
a. Recorded amount of entries in the acquisitions journal
b. Physical existence of inventory
c. Accuracy of accounts receivable
d. Ownership of fixed assets
e. Liability for accounts payable
f. Obsolescence of inventory
g. Existence of petty cash
Click here for the solution: List two examples of audit evidence the auditor can use in support of each of the following
List two examples of audit evidence the auditor can use in support of each of the following:
a. Recorded amount of entries in the acquisitions journal
b. Physical existence of inventory
c. Accuracy of accounts receivable
d. Ownership of fixed assets
e. Liability for accounts payable
f. Obsolescence of inventory
g. Existence of petty cash
Click here for the solution: List two examples of audit evidence the auditor can use in support of each of the following
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