Professional Documents
Culture Documents
Modern Auditing:
Auditing:
Assurance
Assurance Services
Services and
and the
the Integrity
Integrity
th
of
Financial
Reporting,
8
of Financial Reporting, 8th Edition
Edition
William C. Boynton
Raymond N. Johnson
Portland State University
Chapter
Chapter Overview
Overview
Nature
Nature of
of the
the Investing
Investing and
and
Financing
Financing Cycles
Cycles
Overview of the Cycles
Investing Activities
Financing Activities
Understanding
Understanding the
the Entity
Entity and
and
Environment
Environment
Investing
Investing Cycle
Cycle Audit
Audit
Objectives
Objectives
Investing
Investing Cycle
Cycle Analytical
Analytical
Procedures
Procedures
Investing
Investing Cycle
Cycle
Inherent Risk
Substantive
Substantive Tests
Tests for
for Plant
Plant
Assets
Assets
Initial Procedures
Analytical Procedures
Tests of Details of Transactions
Vouch Plant Asset Additions
Vouch Plant Asset Disposals
Review Entries to Repairs and
Maintenance Expense
Substantive
Substantive Tests
Tests for
for Plant
Plant
Assets
Assets
Tests of Details of Balances
Study
Study Break
Break
1. This cycle involves activities such
as the purchase and sale of land,
buildings, and equipment not
generally held for resale.
A.
B.
C.
D.
Investing Cycle
Financing Cycle
Cash Disbursements Cycle
Cash Receipts Cycle
A. Investing Cycle
Study
Study Break
Break
2. All of the following are classes of
transactions associated with the
audit of plant assets, except:
A.
B.
C.
D.
Depreciation Expense
Disposal of Fixed Assets
Payroll Expense
Acquiring of Fixed Assets
C. Payroll Expense
Study
Study Break
Break
3. While auditing the investing cycle, this
test of details of balances allows the
auditor to obtain direct personal
knowledge of the existence of the plant
assets.
A.
B.
C.
D.
Financing
Financing Cycle
Cycle
Financing
Financing Cycle
Cycle Audit
Audit
Objectives
Objectives
Financing
Financing Cycle
Cycle Analytical
Analytical
Procedures
Procedures
Financing
Financing Cycle
Cycle
Inherent Risk
Financing
Financing Cycle
Cycle Functions
Functions and
and
Related
Related Controls
Controls
Authorizing bonds and capital stock
Issuing bonds and capital stock
Paying bond interest and cash dividends
Redeeming and reacquiring bonds and
capital stock
Recording financing transactions
Preliminary
Preliminary Audit
Audit Strategies
Strategies for
for
Long-Term
Long-Term Debt
Debt
Substantive
Substantive Tests
Tests of
of Long-Term
Long-Term
Debt
Debt
Initial Procedures
Analytical Procedures
Substantive
Substantive Tests
Tests of
of Long-Term
Long-Term
Debt
Debt
Tests of Details of Balances
Study
Study Break
Break
4. This cycle involves activities such
as acquiring debt, issuing bonds,
and issuing common stock.
A.
B.
C.
D.
Investing Cycle
Financing Cycle
Cash Disbursements Cycle
Cash Receipts Cycle
B. Financing Cycle
Study
Study Break
Break
5. This financing function involves
making payments to the proper payees
in according with board of director or
management authorizations.
A.
B.
C.
D.
Authorizing bonds
Authorizing capital stock
Paying bond interest and cash dividends
Recording financing transactions
Study
Study Break
Break
6. All of the following are tests of
details of balances for the financing
cycle, except:
A.
B.
C.
D.
Preliminary
Preliminary Audit
Audit Strategies
Strategies for
for
Shareholders
Shareholders Equity
Equity
Substantive
Substantive Tests
Tests of
of
Stockholders
Stockholders Equity
Equity
Initial Procedures
Analytical Procedures
Tests of Details of Transactions
Analytical
Analytical Procedures
Procedures
Substantive
Substantive Tests
Tests of
of
Stockholders
Stockholders Equity
Equity
Tests of Details of Balances