Ch 7 - Under the IFACs Code of Ethics for Professional Accountants An accountant in public practice may accept an inconsequential gift from a client

Ch 7 - Under the IFACs Code of Ethics for Professional...

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Under the IFAC’s Code of Ethics for Professional Accountants , An accountant in public practice may accept an inconsequential gift from a client. Which of the following is a basic tool used by the auditor to control the audit work and review the progress of the audit? Audit plan An auditor’s decision either to apply analytical procedures as substantive procedures or to perform tests of transactions and account balances usually is determined by the Auditor’s determination about whether audit risk can be sufficiently reduced. Which result of an analytical procedure suggests the existence of obsolete merchandise? Decrease in the inventory turnover rate Which of the following procedures most likely could assist an auditor in identifying related party transactions . Reviewing confirmations of compensating balance arrangements. For effective internal control, the accounts payable department ordinarily should Establish the agreement of the vendor’s invoice with the receiving report and purchase order. The best approach for minimizing the likelihood of software incompatibilities leading to unintelligible messages is for a company and its customers Agree to synchronize their updating of EDI-related software. An auditor is conducting an integrated examination of internal control with the audit of a nonissuer’s financial statements. In applying the top-down approach, the auditor first Focuses on entity-level controls and then significant accounts . The objective of tests of details of transactions performed as substantive procedures is to Detect material misstatements at the relevant assertion level. When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely is V endors with whom the entity has previously done business
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Tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year most likely would provide assurance about the relevant assertion regarding CUTOFF The refusal of a client’s legal counsel to provide information requested in an inquiry letter generally is considered A limitation on the scope of the audit. Zero Corp. suffered a loss having a material effect on its financial statements as a result of a customer’s bankruptcy that rendered a trade receivable uncollectible. This bankruptcy occurred suddenly because of a natural disaster 10 days after Zero’s balance sheet date but 1 month before the issuance of the financial statements and the auditor’s report. Under these circumstances, the Event Requires Auditor’s Financial Financial Report Should Statements Statement Be Modified Should Be Disclosure, but for a Lack of Adjusted No Adjustment Consistency NO YES NO For which of the following audit tests would an auditor most likely use attribute sampling?
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  • Spring '15
  • Jim Collins
  • Study Guide, Electronic Data Interchange

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