The following questions concern auditing year-end cash and financial instruments. Choose the best response. a. Which of the following controls would most likely detect a kiting scheme? (1) Preparing a bank reconciliation (2) Using a lockbox system for customer receipts (3) Comparing the details of deposit tickets and recorded remittance advices (4) Preparing a bank […]
Explain the relationships among the initial assessed control risk, tests of controls and substantive tests of transactions for cash receipts, and the tests of details of cash balances. 23-2 (OBJECTIVE 23-1) What is meant by an imprest bank account for a branch operation? Explain the purpose of using this type of bank account. 23-3 (OBJECTIVE […]
CASH IN THE BANK AND TRANSACTION CYCLES Show the relationship of cash in the bank to the various transaction cycles.
The following audit procedures are commonly performed by auditors in the verification of owners’ equity: 1. Review articles of incorporation and bylaws for provisions about owners’ equity. 2. Analyze all owners’ equity accounts for the year and document the nature of any recorded change in each account. 3. Confirm capital stock transactions with the stock […]
The Redford Corporation took out a 20-year mortgage on June 15, 2019, for $2,600,000 and pledged its only manufacturing building and the land on which the building stands as collateral. Each month subsequent to the issue of the mortgage, a payment of $17,885 was paid to the mortgagor. You are in charge of the current […]
The ending general ledger balance of $568,000 in notes payable for the Kolman Production Company is made up of 20 notes to nine different payees. The notes vary in duration anywhere from 30 days to two years, and in amounts from $10,000 to $50,000. In some cases, the notes were issued for cash loans; in […]
The following questions concern the audit of accounts in the capital acquisition and repayment cycle. Choose the best response. a. Which of the following audit procedures would be most relevant when examining the completeness transaction-related audit objective for capital stock? (1) The auditor examines minutes of the board of directors’ meetings to identify any actions […]
1. What are the primary objectives in the audit of owners’ equity accounts? 2. Describe the duties of a stock registrar and a transfer agent. How does the use of their services affect the client’s internal controls?
AUDIT OF THE CAPITAL ACQUISITION AND REPAYMENT CYCLE Identify the accounts and the unique characteristics of the capital acquisition andrepayment cycle.Design and perform audit tests of notes payable and related accounts and transactions.Identify the primary concerns in the audit of owners’ equity transactions.Design and perform tests of controls, substantive tests of transactions, and tests ofdetails […]
In an annual audit at December 31, 2019, you find the following transactions near the closing date: 1. Merchandise costing $625 was received on December 28, 2019, and the invoice was not recorded. You located it in the hands of the purchasing agent; it was marked “on consignment.” 2. A packing case containing products costing […]
