Deck 6

Question 1

in evaluating the adequacy of the allowance for credit losses, an auditor most likely reviews the entity’s aging of receivables to support the assertion of _________

Answer 1

VALUATION AND ALLOCATION

Question 2

To support the assertion of _______, an auditor would most likely confirm accounts receivable.

Answer 2

EXISTENCE

Question 3

An auditor would trace from shipping records to the sales journal and the accounts receivable ledger to determine if all shipments were properly recorded as sales to test ________ assertion

Answer 3

COMPLETENESS

Question 4

The assertion of __________ relating to accounts receivable would be supported by examining appropriate supporting documentation

Answer 4

RIGHTS AND OBLIGATIONS

Question 5

positive confirmations would be appropriate when the majority of the A/R accounts are ______; negative confirmations should be used when there are a LARGE number of _____ account balances to be confirmed

Answer 5

LARGE; SMALL

Question 6

A record count is a control procedure where the entity counts the number of sales records (such as sales invoices) entered into the accounting system during the period.

this would help test completeness assertion for revenue accounts (T/F)

Answer 6

TRUE

Question 7

negative confirmation requests may be used when the combined assessed level of inherent and control risk is _____ (high or low), which would generally imply that a higher level of detection risk could be accepted

Answer 7

LOW