Sample Design and Selection.

Sample design Planning the confirmation of accounts receivable. There are 2,000 Customers with a total book value of $5,643,200. I am needing guidance with this problem I have been working on it since last week and it is due on Wednesday. See attached file for full problem description.

Audit questions about test of transactions for sales, cutoff, purchases and payroll control risk

1. At which point in an ordinary sales transaction of a wholesaling business would a lack of specific authorization be of least concern to the auditor in the conduct of an audit? A. Granting of credit. B. Selling of goods for cash. C. Shipment of goods. D. Determination of discounts. 2. Which of the following is most likely to be detected by an auditor’s review of the client’s sales cutoff? A. Lapping of year-end accounts receivable. B. Excessive sales discounts. C. Unrecorded sales for the year. D. Unauthorized goods returned for credit. 3. Purchase cutoff procedures should be designed to test whether or not all inventory A. On the year end balance sheet was carried at lower ... click for more

Auditing

11. An auditor will ordinarily examine invoices from lawyers primarily in order to A. Identify possible unasserted litigation, claims, and assessments. B. Substantiate accruals. C. Assess the legal ramifications of litigation in progress. D. Estimate the dollar amount of contingent liabilities. 12. Which of the following is one of the better auditing techniques that might be used by an auditor to detect kiting between intercompany banks? A. Review composition of authenticated deposit slips. B. Prepare a schedule of bank transfers. C. Review subsequent bank statements received directly from the banks. D. Prepare year-end bank reconciliations. 13. An auditor testing long-term inv... click for more

Auditing

16. To strengthen internal control over custody of heavy mobile equipment, the client would most likely institute a policy requiring a periodic A. Increase in insurance coverage. B. Verification of liens, pledges, and collateralizations. C. Accounting for work orders D. Inspection of equipment and reconciliation with accounting records. 17. Abbot, CPA, as principal auditor for consolidated financial statements is using a qualified report of another auditor. Abbot does not consider the qualification material relative to the consolidated financial statements. What recognition, if any, must Abbot make in his report to the report of the other audit? A. He must refer to the qualification ... click for more

Tests of Controls

If a company’s control risk is low, the auditor needs to gather evidence on the operating effectiveness of the controls. Required a. For each of the following control activities, indicate the audit procedure the auditor would use to determine its operating effectiveness. b. Briefly indicate the audit implication; that is, how would direct tests of account balances need to be modified if the auditor finds that the control procedure is not working as planned? Controls: 1. Credit approval by the credit department is required before salespersons accept orders of more than $5,000 and for all customers who have a past-due balance higher than $3,000. 2. All merchandise receipts are re... click for more