ACC 403 QUIZ CHAPTERS 21-24

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1.

Testing the information on the aged trial balance for detail tie-in is a necessary audit
procedure, which would normally include:

2.

Which of the following is the principle "weakness" of using negative confirmations for your
tests of details of balances for accounts receivable?

3.

Most tests of accounts receivable are based on what schedule, file, or listing?

4.

When do most companies record sales returns and allowances?

5.

Audit procedures designed to uncover credit sales made after the client's fiscal year end that
relate to the current year being audited provide evidence for which of the following audit
objective?

6.

Tests of which balance-related audit objective are normally performed first in an audit of the
sales and collection?

7.

The correct accounting for accounts receivable accounts with credit balances, provided they
are significant, would be:

8.

An auditor is performing a credit analysis of customers with balances over 60 days due. She
is most likely obtaining evidence for which audit related objective?

9.

In performing your audit you noticed that often times goods are shipped that are not matched
with the corresponding sales invoice. This control deficiency could cause:

10.

For cash receipts, the occurrence transaction-related audit objective affects which of the
following balance-related audit objective?

11.

An auditor selects a sample from the file of shipping documents to determine whether
invoices were prepared. This test is performed to satisfy the audit objective of:

12.

The audit procedure of tracing sales invoices to shipping documents will provide the auditor
evidence that:

13.

The most important test of details of balances to determine the existence of recorded
accounts receivable is:

14.

15.
16.

For most audits, inherent risk for accounts receivable is moderate or low except for which
balance-related audit objectives?
Cutoff misstatements occur when:
Tests for rates of occurrence are appropriately used in all but which of the following
situations?

17.

If acceptable audit risk is increased, acceptable risk of incorrect acceptance should be:

18.

Which of the following is not a type of statistical method that provides results in dollar terms?

19.

The method used to measure the estimated total error amount in a population when there is
both a recorded value and an audited value for each item in the sample is:

20.

What is the purpose of applying stratified sampling to a population?

21.

The final step in the evaluation of the audit results is the decision to:

22.

In estimating the population misstatement, the first step in projecting from the sample to the
population is to:

23.

You are auditing Nelson and Company and determined that the sample results support a
conclusion that the account is materially misstated, when in fact it was not misstated. This
illustrates the risk of:

24.

As the amount of misstatements expected in the population approaches tolerable

misstatement, the planned sample size will:

25.

The auditor is concerned with the audited value rather than the error amount of each item in
the sample when using:

26.

When selecting a sample size for substantive tests of balances which factor, other factors
being equal, would result in a larger sample?

27.

The risk the auditor is willing to take of accepting a balance as correct when the true
misstatement in the balance under audit is greater than the tolerable misstatement is:

28.

When errors are found in a sample, auditors in practice generally make the assumption:

29.

Which of the following does not have to be considered in determining the initial sample size
of a test of details?

30.

The auditors principal objective when using a sample of tests of details of balances is
whether the:

1.