ACCT402: Auditing and Assurance: Concepts and Application 1

Final Examination
Miles Nicko M. Santos, CPA
College of St. John - Roxas
AY 2020-2021

Part I: Test of Knowledge and Reasoning

1. Give three instances where confirmation is not a needed audit procedure for receivables and sales and
explain why.
2. Distinguish positive confirmation from negative confirmation. 
3. What are the three common ways to value allowance for doubtful accounts? Briefly discuss each.
4. Give two instances which caused account receivable account to have reported a credit balance and narrate
the two scenarios.

5. Explain the respective responsibility of the management and the auditor in an inventory count.
6. What are the alternative actions that an auditor may execute for verifying of the existence of inventory when
he is engaged after the year-end inventory count?
7. To verify completeness and accuracy of inventory balances, why is it important for an auditor to perform
subsidiary to general ledger reconciliation?
8. In the execution of cut-off procedures relating to the audit of inventory, what are the management assertions
that an auditor needed to verify? Explain for each assertion of how does an auditor verify such?

Part II: Audit Cases

Case 1: Valuation of Accounts Receivable and Allowance for Doubtful Accounts

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ACCT402: Auditing and Assurance: Concepts and Application 1
Final Examination
Case 2: Audit of Long-term Nontrade Receivables

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ACCT402: Auditing and Assurance: Concepts and Application 1
Final Examination
Case 3: Correction of Errors in Purchase and Sales Transactions

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ACCT402: Auditing and Assurance: Concepts and Application 1
Final Examination
Case 4: Substantive Test of Details of Inventory Balances and its Effect to Net Income

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ACCT402: Auditing and Assurance: Concepts and Application 1
Final Examination