Same instructions as the previous Assessment Quiz.

Question 1

If reported sales for 2019 erroneously included sales that occurred in 2020, the assertion violated on the
2019 statements would be (cite possible assertion/s affected).

Question 2

An auditor most likely would make inquiries of production and sales personnel concerning possible
obsolete or slow-moving inventory to support management’s financial statement assertion of

A. Valuation or allocation

B. Rights and obligations

C. Existence or occurrence

D. Presentation and disclosure

Question 3

Identify the specific audit procedure that will most likely detect or audit the following. Explain your reason.

A. Weak segregation of duties -

B. Components of the line item Property, Plant and Equipment -

C. Unusual fluctuations in marketing costs -

D. Existence of inventories held by a third-party warehouse -

Question 4

In determining validity of accounts receivable, which of the following would the auditor consider to be the
most reliable?

A. Documentary evidence that supports the accounts receivable

B. Credits to accounts receivable from the cash receipts book after the close of business at year-end

C. Direct telephone communication between the auditor and debtor

D. Confirmation replies received directly from customers

Question 5
 Which of the following is not an example of confirmation evidence?

A. Requesting the client's outside legal counsel to evaluate the possible outcome of pending litigation

B. Questioning the client's employees about existing internal control policies and procedures

C. Requesting the client's customers to verify year-end accounts receivable balances

D. Requesting payees to respond in writing to the terms contained in notes payable appearing in the client's
ledger

Question 6

In auditing the existence of equipment, which of the following evidence is most reliable?

A. Evidence from inquiry with plant employee

B. Evidence from inspection of purchase invoice

C. Evidence from inspection of the equipment in the plant

D. Evidence from inquiry with plant manager

Question 7

The auditor was in attendance during the client’s physical count of inventories at the end of the year. After
the count, the auditor asked for a client’s copy of the count sheets and located some stocks listed in the
sheets to the warehouse floor. Also, the auditor traced some stocks from the warehouse floor to the count
sheets to check whether they were included.

What procedures did the auditor perform?

Question 8

When procedures performed by employees in the company, on a regular basis, leave no documented
trails, the auditor conducts his tests primarily through what audit procedure/

Question 9

In which of these objectives is confirmation not appropriate?

A. To ask the external legal counsel to evaluate the outcome of a litigation

B. To ask a lessee to verify an important provision in a lease contract

C. To ask the credit manager about the process of approving customer orders
D. To ask consignees about the merchandise delivered to them

Question 10

Assuming you were an auditor, if you were to choose ONE procedure and only one procedure only, what
would you perform and why?