Audit Procedures by Transaction Cycle Flashcards Preview

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Flashcards in Audit Procedures by Transaction Cycle Deck (43):
1

Does the revenue cycle require tracing or vouching?

Vouching

2

What is the biggest audit concern?

Overstatement of assets or revenues

3

What reduces risk of overstatement?

Segregation of duties

4

What are the 3 functions to the segregation of duties?

Authority, recordkeeping, and custody

5

What can cause of problem with segregation of duties?

Collusion and management override

6

Using strong internal control, segregationl of the functions in a sales transaction should exist as follows?

Preparation of the sales order, credit approval, shipment, billing, and accounting

7

What assertion is credit approval?

Valuation

8

What function is involved in credit approval?

Authority

9

What function is involved in shipment?

Custody

10

What function is involved in billing and accounting?

Recordkeeping

11

Can incoming mail be opened by a person who has access to the accounts receivable ledger?

No

12

The receipts should be listed in detail and sent to?

Cashier, Accounts receivable department, Accounting department

13

What should the cashier do with the receipts?

Prepare the bank deposit

14

What assertions are used when auditing accounts receivable?

Completeness, valuation, allocation, and accuracy, existence and occurrence, and rights and obligations

15

What assertions are used when auditing sales transactions?

Completeness, cutoff, valuation, allocation, and accuracy, existence and occurrence, and understandability and classification

16

What assertions are used when auditing presentation and disclosure?

Completeness, valuation, allocation, and accuracy, rights and obligations and occurrence, and understandability and classification

17

Confirmations generally provide evidence regarding?

Existence and rights and obligations

18

Does the expenditure cycle require tracing or vouching?

Tracing

19

What are the functions in a purchase transaction that should be segregated?

Purchase requisition, purchase orders, and receipt of goods or services

20

Should the purchase order be given to the shipping department with the quantity ordered?

No

21

What are the 3 functions the accounting department has when pertaining to accounts payable?

Recording the payable, approving the invoice for payment and recording payment after paid by treasurer

22

What function of segregation of duty deals with recording the payable?

Recordkeeping

23

What function in segregation of duties deal with approving invoices for payment and recording payment?

Authority

24

When an invoice arrives, the accounting department approves it by?

Matching the invoice, purchase order, receiving report, and the requisition

25

Who pays the bill?

Treasury

26

Should the functions of approving the payment and signing the checks be segregated?

Yes

27

What are all the treasurer duties dealing with a disbursement?

Prepares, signs, and mails the check and cancels all supporting document after payment

28

What assertions are used when auditing accounts payable?

Completeness, valuation, allocation, and accuracy, existence and occurrence, and rights and obligations

29

What procedures is performed for the assertion of completeness when auditing accounts payable?

Search for Unrecorded Liabilities

30

What assertions are used for auditing purchase transactions?

Completeness, cutoff, valuation, allocation, and accuracy, existence and occurrence, and understandability and classification

31

What assertions are used when auditing presentation and disclosure?

Completeness, valuation, allocation, and accuracy, rights and obligations and occurrence, and understandability and classification

32

Does the cash cycle require tracing or vouching?

Vouching

33

What are the 2 cash cycle fraud schemes?

Lapping and kiting

34

What assertions are used whern auditing the ending cash balance?

Completeness, valuation and allocation, existence

35

What assertions are used when auditing cash receipts and cash disbursements?

Completeness, cutoff, valuation, allocation, and accuracy, existence and occurrence, and understandability and classification

36

Does the inventory cycle require tracing or vouching?

Vouching

37

Duties that should be segregated in the inventory cycle include?

Purchasing, Receiving, warehouse, and shipping

38

Should the investment cycle require vouching or tracing?

Vouching

39

Should property, plant, and equipment cycle require vouching or tracing?

Vouching

40

Should payroll and personnel cycle require tracing or vouching?

Tracing

41

Segregation of duties in payroll should include?

Authorization to employ and pay, supervision, timekeeping and cost accounting, payroll check preparation, and check distribution

42

Whose function is it to hire?

HR

43

Should financing cycle require tracing or vouching?

Tracing