Chapter 16 & 17 Final

12/16/21, 10:13 AM Chapter 16 & 17 Final - Audit Flashcards | Quizlet
Chapter 16 & 17 Final - Audit Study
Chapter 16 & 17 Final - Audit

Terms in this set (29)
Tests of detail tie-in are False

normally conducted last in the
audit of the sales and
collections cycle.
True or False
It is common to use a False

combination of positive and
negative confirmations by
sending the latter to accounts
with large balances and the
former to those with small
balances.
True or False
https://quizlet.com/62888254/chapter-16-17-final-audit-flash-cards/ 1/18
Chapter 16internal
If the client's & 17 Final
control- Audit a larger sample may be needed to verify cutoff.Study
for recording sales returns and
allowances is evaluated as
ineffective:
a larger sample may be

needed to verify cutoff.
sampling is not appropriate.
all sales returns must be traced

to supporting documentation.
all sales returns must be

confirmed with the customer.
For sales, the completeness False

transaction-related audit
objective affects the existence
balance-related audit
objective.
True or False
Chapter 16 & 17 Final - Audit

If auditors consider True Study
confirmations of accounts
receivable to be ineffective
evidence because response
rates will be very low, they
need not confirm accounts
receivable.
True or False
Analytical procedures:
performed during the detailed testing phase are
done before tests of details of balances.
are only done during the

planning of the audit and when
performing detailed tests.
performed during the detailed

testing phase are done before
tests of details of balances.
performed during the detailed

testing phase are done before
the balance sheet date.
are performed only on

accounts receivable, not on
the entire sales and collection
cycle.
Chapter 16following
Which of the & 17 Final
is the- Audit Conclusions drawn from receiving no reply mayStudy
not
principle "weakness" of using be correct.
negative confirmations for your
tests of details of balances for
accounts receivable?
They can only be used for

large balance accounts.
They cannot not be used when

account balances "bunch"
around a mean value.
Conclusions drawn from

receiving no reply may not be
correct.
Response rates are generally

too low to draw any
conclusions.
Chapter 16 & 17
A type of positive Final - Audit
confirmation Invoice Study
in which an individual invoice is

confirmed, rather than the
customer's entire accounts
receivable balance is the ________
confirmation.
invoice
specific
balance
voucher
The population standard False

deviation has a significant
effect on the computed
precision interval.
True or False
Chapter 16 & 17
While performing Final - Audit
a substantive Increase detection risk in the relevant areas. Study
test of details during an audit,

the auditor determined that the
sample results supported the
conclusion that the recorded
account balance was materially
misstated. Which of the
following is the least likely
auditor reaction to this
discovery?
Perform expanded audit tests

in the relevant areas.
Increase detection risk in the

relevant areas.
Increase the sample size.
Take no action until tests of

other audit areas are
completed.
Chapter 16are
When errors & found
17 Final
in a - Audit that the actual sample errors are representativeStudy
of
sample, auditors in practice the population errors.
generally make the assumption:
of a 100% assumption for all

errors.
that the population errors are

larger than the sample errors.
that the population errors are

smaller than the sample errors.
that the actual sample errors

are representative of the
population errors.
An increased sample size will False

always cause the population to
be accepted.
True or False
To determine the sampling False

interval, the population is
divided by the confidence
factor.
True or False
Chapter 16 & find

Why do auditors 17 Final
MUS - Audit MUS is easy to use in the audit environment Study
appealing?
MUS increases the likelihood

of selecting a balance of high
and low dollar items.
MUS is easy to use in the audit

environment.
MUS provides a nonstatistical,

rather than a statistical,
conclusion.
When misstatements are found,

MUS rarely produces bounds
in excess of materiality.
Acceptable audit risk and False

acceptable risk of incorrect
acceptance are inversely
related; that is, as AAR
increases, ARIA decreases.
True or False
Chapter 16 & 17 Final

The audit procedure that - Audit confirmations. Study
provides the auditor with the

most appropriate evidence
when performing test of details
of balances for accounts
receivable is:
confirmations.
recalculation of the aged

receivables and uncollectible
accounts.
tracing credit memos for

returned merchandise to
receiving room reports.
tracing from shipping

documents to journals to the
accounts receivable ledger.
Chapter 16to&test
A procedure 17 for
Final - Audit
a cash tracing recorded cash receipts to bank depositsStudy
on
receipts cutoff error is:
the bank statement of a different period.
reconciling the bank statement.
performing a four-column
proof-of-cash.
observing the counting of cash

at the balance sheet date.
tracing recorded cash receipts

to bank deposits on the bank
statement of a different period.
Recording a sale that did not True

occur violates the occurrence
transaction-related audit
objective and the existence
balance-related audit
objective.
True or False
Chapter
An auditor 16 & 17 Final
is performing a - Audit Realizable value Study
credit analysis of customers

with balances over 60 days
due. She is most likely
obtaining evidence for which
audit related objective?
Realizable value
Existence
Completeness
Occurrence
Both U.S. and international False

auditing standards require the
use of confirmations for
accounts receivable.
True or False
Chapter 16 &a17
For most audits, Finalcash
proper - Audit True Study
receipts cutoff is less important

than either the sales or the
sales returns and allowances
cutoff since cash only affects
the balance sheet, and not
earnings.
True or False
Which of the following most Unrecorded sales for the year

likely would be detected by a
review of a client's sales
cutoff?
Excessive sales discounts
Unrecorded sales for the year
Unauthorized goods returned

for credit
Lapping of year-end accounts

receivable
Chapter 16 & 17 Final

The risk of incorrect - Audit
rejection is high Study
important only when there is a

________ cost to increasing the
sample size.
high
low
moderate
marginal
Chapter 16following
Which of the & 17 Final - Audit Variable sampling Study
sampling plans would be

designed to estimate a
numerical measurement of a
population, such as a dollar
value?
Numerical sampling
Discovery sampling
Attributes sampling
Variable sampling
Chapter 16 & 17
While performing Final - Audit
a substantive Increase detection risk in the relevant areas. Study
test of details during an audit,

the auditor determined that the
sample results supported the
conclusion that the recorded
account balance was materially
misstated. Which of the
following is the least likely
auditor reaction to this
discovery?
Perform expanded audit tests

in the relevant areas.
Increase detection risk in the

relevant areas.
Increase the sample size.
Take no action until tests of

other audit areas are
completed.
When using difference True

estimation, the precision
interval is calculated by a
statistical formula.
True or False
Chapter 16 &for17sampling
The allowance Final -risk
Audit basic precision. Study
when no misstatements are

found in the sample is:
tolerable risk of misstatement.
basic precision.
confidence factor.
population variance.
Chapter
If an auditor16concludes
& 17 Final
that- Audit The acceptable risk of incorrect acceptance will be
Study
internal controls are likely to increased.

be effective, the preliminary
assessment of control risk can
be reduced, leading to which
of the following impacts on the
acceptable risk of incorrect
acceptance?
The acceptable risk of

incorrect acceptance will be
reduced.

increased.

eliminated.

incorrect acceptance will not
be impacted.
Chapter 16following
Which of the & 17 Final - aAudit
is not Population items that should have a zero balance
Study
problem with monetary unit but do not

selection?
Population items with a zero

recorded balance
Population items that should

have a zero balance but do not
Accounts with negative

balances
Accounts with small recorded

balances that are significantly
understated

Chapter 16 & 17 Final - Audit Flashcards - Quizlet

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 16 & 17 Final - Audit Flashcards - Quizlet

Uploaded by

Copyright:

Available Formats

12/16/21, 10:13 AM Chapter 16 & 17 Final - Audit Flashcards | Quizlet

Chapter 16 & 17 Final - Audit Study

Chapter 16 & 17 Final - Audit

Tests of detail tie-in are False

It is common to use a False

a larger sample may be

sampling is not appropriate.

all sales returns must be traced

all sales returns must be

For sales, the completeness False

Chapter 16 & 17 Final - Audit

are only done during the

performed during the detailed

performed during the detailed

are performed only on

They can only be used for

They cannot not be used when

Conclusions drawn from

Response rates are generally

in which an individual invoice is

The population standard False

test of details during an audit,

Perform expanded audit tests

Increase detection risk in the

Increase the sample size.

Take no action until tests of

of a 100% assumption for all

that the population errors are

that the population errors are

that the actual sample errors

An increased sample size will False

To determine the sampling False

Chapter 16 & find

MUS increases the likelihood

MUS is easy to use in the audit

MUS provides a nonstatistical,

When misstatements are found,

Acceptable audit risk and False

provides the auditor with the

recalculation of the aged

tracing credit memos for

tracing from shipping

reconciling the bank statement.

observing the counting of cash

tracing recorded cash receipts

Recording a sale that did not True

credit analysis of customers

Both U.S. and international False

receipts cutoff is less important

Which of the following most Unrecorded sales for the year

Excessive sales discounts

Unrecorded sales for the year

Unauthorized goods returned

Lapping of year-end accounts

Chapter 16 & 17 Final

important only when there is a

sampling plans would be

test of details during an audit,

Perform expanded audit tests

Increase detection risk in the

Increase the sample size.