You intend to use MUS as a part of the audit of several accounts for Roynpower Manufacturing Company. You have done the audit for the past several years, and there has rarely been an adjusting entry of any kind. Your audit tests of all tests of controls and substantive tests of transactions cycles were completed […]
What are the major differences between (a) audit sampling for tests of controls and substantive tests of transactions and (b) audit sampling for tests of details of balances? Define stratified sampling and explain its importance in auditing. How can an auditor obtain a stratified sample of 30 items from each of three strata in the […]
AUDIT SAMPLING FOR TESTS OF DETAILS OF BALANCES 1. What are the major differences in the 14 steps used in nonstatistical sampling for tests of details of balances versus the steps for tests of controls and substantive tests of transactions? 2. What alternative courses of action are appropriate when a population is rejected using nonstatistical […]
1. What are the factors contribute to mobility? 2. Why is mobile global traffic increasing? 3. What accounts for the increased in mobile traffic? 4. Give some examples of VoIP networks. 5. How is NFC different from RFID? 6. What are the two components of a wireless network infrastructure? 7. What is near-field communication and […]
The Salah Company sells electronics equipment and has grown rapidly in the last year by adding new customers. The audit partner has asked you to evaluate the allowance for doubtful accounts at December 31, 2019. Comparative information on sales and accounts receivable is included next: Year Ended Year Ended 12/31/19 12/31/18 Sales $12,169,876 $10,452,513 Accounts […]
Tim Flynn is the engagement manager for the audit of O’Donnell Enterprises. Tim is currently planning tests of details of balances for accounts receivable and is considering the use of electronic confirmation requests to improve response rates. The historical response rate to written confirmation requests sent to O’Donnell’s customers has been below 50 percent and […]
The following are audit procedures in the sales and collection cycle: 1. Foot the aged trial balance using audit software and compare the total with the general ledger. 2. Match sales invoices with subsequent cash receipts using audit software. 3. Examine a sample of customer orders and see whether each has a credit authorization. 4. […]
The following questions concern auditor responsibilities related to the audit of accounts receivable. Choose the best response. a. 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, which action should the auditor take? (1) Consider the nonresponse […]
Distinguish among tests of details of balances, tests of controls, and substantive tests of transactions for the sales and collection cycle. Explain how the tests of controls and substantive tests of transactions affect the tests of details of balances. 16-2 (OBJECTIVE 16-1) Cynthia Roberts, CPA, expresses the following viewpoint: “I do not believe in performing […]
1. Discuss the following items with client personnel and observe activities: a. Segregation of duties b. Use of an adequate chart of accounts c. Use of pre-approved vendor list. d. Monthly reconciliation of accounts payable master file with the general ledger 2. Foot acquisitions and cash disbursements journals for a test month and trace postings […]
