Principles of Auditing & other assurance services- Chapter 14 Exam Bank Solution Manual (Rated A+)
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Module
Principles of Auditing & other assurance services
Institution
Principles Of Auditing & Other Assurance Services
Principles of Auditing & other assurance services- Chapter 14 Exam Bank Solution Manual (Rated A+)
Auditor's concern with Assets - Answers Concerned with Overstatement
Usually requires an improper entry or fictitious transaction
Auditor's concern with Liabilities - Answers Concerned with Under...
Principles of Auditing & other assurance services- Chapter 14 Exam Bank Solution Manual (Rated A+)
Auditor's concern with Assets - Answers Concerned with Overstatement
Usually requires an improper entry or fictitious transaction
Auditor's concern with Liabilities - Answers Concerned with Understatement or omission
Usually created by failing to make an entry
Internal Control over A/P - Answers A/R of one company = A/P of another
A/P Department - Answers a. Stamp all forms with date received and use serial numbers to control
vouchers.
b. Separate function of invoice verification and approval from cash disbursement function.
c. Reconcile vendors statements to A/P ledger monthly.
Obtain understanding of Internal Control - Answers a. Flowchart, narrative, questionnaire, inquires of
personnel.
b. Conduct a walk-through test of few transactions.
c. Observe and inquire about segregation of duties and inspect various documents.
d. Consider types of misstatements.
Types of Misstatements - Answers a. Inaccurate recording of a purchase or disbursement.
b. Cutoff problems - early/late recording of cost of purchases.
c. Misappropriation of purchases.
d. Duplicate recording of purchases.
A/P substantive tests - Answers 1. Obtain a trial balance of A/P as of the B/S date & reconcile with the
G/L. (clerical accuracy)
2. Vouch A/P to selected creditors by inspection of supporting documents. (existence, valuation,
obligation)
3. Reconcile liabilities with monthly statements. (existence, valuation, obligations, completeness)
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