A4- Further Procedures, Conclusions, And Communications

Question 1

Which cycle includes sales revenues, receivables, & cash receipts?

Answer 1

Revenue cycle

Question 2

Which cycle includes purchases, payables, and cash disbursements

Answer 2

Expenditure cycle

Question 3

Which cycle includes cash receipts and cash disbursements

Answer 3

Cash cycle

Question 4

Which cycle includes perpetual inventory, physical counts, and manufacturing costs

Answer 4

Inventory cycle

Question 5

Which cycle includes investments in debt & equity & the income received from investments?

Answer 5

Investments cycle

Question 6

Which cycle includes cycles for PP&E, Payroll and personnel, and financing

Answer 6

Other transaction cycles

Question 7

2 common cash fraud schemes

Answer 7

Lapping & kiting

Question 8

Internal controls related to the expenditure cycle

Answer 8

1- purchase requisition
2- purchase orders
3- receipt of goods or services

Question 9

Internal controls related to the inventory cycle

Answer 9

1- purchasing
2- receiving
3- warehouse
4- shipping

Question 10

Internal controls related to the investment cycle

Answer 10

1- authorization of purchase or sale of investments
2- custody of investments
3- record keeping

Question 11

Tracing is a test for what assertion? (Ex. Tracing shipping documents to entries in sales journal )

Answer 11

Completeness

Question 12

Accounts payable should receive which 3 documents

Answer 12

1- purchase order
2- receiving report
3- vendor invoice

Question 13

To audit retained earnings, the auditor does what

Answer 13

Analyze the retained earnings account since the last audit

Question 14

Approving timesheets is a what function

Answer 14

Authorization function

Question 15

Authorization function should be separated from what

Answer 15

Custody of assets

Question 16

What should be documented when an auditor believes there is Substantial doubt about going concern

Answer 16

1- conditions that gave rise to substantial doubt
2- conclusion about whether substantial doubt remains or is alleviated
3- effect of auditors conclusion on audit report

Question 17

Materiality doesn’t matter when it comes to

Answer 17

Fraud