Audit Evidence

6-22 (Audit evidence) during the course of an audit, the auditor examines a wide variety of documentation. Listed below are some forms of documentary evidence and the sources from which they are obtained. 1. Bank statement sent directly to the auditor by the bank. 2. Creditor monthly statement obtained from client’s files. 3. Vouchers in client’s unpaid voucher file. 4. Duplicate sales invoices in filled order file. 5. Time tickets filed in payroll department. 6. Credit memo in customer’s file. 7. Material requisitions filed in storeroom. 8. Bank statement in client’s files. 9. Management working papers in making accounting estimates. 10. Paid checks returned wi... click for more

Which of the following combinations of procedures would an auditor be most likely to perform to obtain evidence about fixed-asset additions?

6. Which of the following combinations of procedures would an auditor be most likely to perform to obtain evidence about fixed-asset additions? a.Inspecting documents and physically examining assets. b. Recomputing calculations and obtaining written management representations. c. Observing operating activities and comparing balances to prior period balances. d. Confirming ownership and corroborating transactions through inquiries of client personnel. 7. In which of the following circumstances would an auditor usually choose between issuing a qualified opinion and issuing a disclaimer of opinion? a. Departure from generally accepted accounting principles. b. Inadequate disclosure of... click for more

How do you define scienter within the context of accountant’s legal liability?

How do you define scienter within the context of accountant’s legal liability?

Describe lapping within the context of accounts receivable. What is the method for detecting lapping?

Describe lapping within the context of accounts receivable. What is the method for detecting lapping?

Evaluation of internal controls—raw materials and supplies inventory

16-26 (Evaluation of internal controls—raw materials and supplies inventory) The Jameson Company produces a variety of chemical products for use by plastics manufacturers. The plant operates on two shifts, five days per week, with maintenance work performed on the third shift and on Saturdays as required. An audit conducted by the staff of the new corporate internal audit department has recently been completed, and the comments on inventory control were not favorable. Audit comments were particularly directed to the control of raw material ingredients and maintenance materials. Raw material ingredients are received at the back of the plant, signed for by one of the employees of the bat... click for more