midterm2markingkey%20sectionB - Mid-Term Examination #2 ADM...

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Mid-Term Examination #2 ADM 3349 B AUDITING THEORY November 18, 2009 Professor: B. Church INSTRUCTIONS 1. Books and notes are not permitted. 2. Calculators are permitted. 3. Complete all questions. 4. Write in pen. 5. Answer all questions directly on the examination paper. 6. Follow the suggested time frames for each question. Question Marks Suggested Time Grade 1 30 30 minutes 2 50 60 minutes Total 80 90 minutes NAME: __________________________________________ STUDENT #: ________________________ Statement of Academic Integrity The School of Management does not condone academic fraud, an act by a student that may result in a false academic evaluation of that student or of another student. Without limiting the generality of this definition, academic fraud occurs when a student commits any of the following offences: plagiarism or cheating of any kind, use of books, notes, mathematical tables, dictionaries or other study aid unless an explicit written note to the contrary appears on the exam, to have in his/her possession cameras, radios (radios with head sets), tape recorders, pagers, cell phones, or any other communication device which has not been previously authorized in writing. Statement to be signed by the student: I have read the text on academic integrity and I pledge not to have committed or attempted to commit academic fraud in this examination. Signed:______________________________________ Note: an examination copy or booklet without that signed statement will not be graded and will receive a final exam grade of zero.
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QUESTION 1 Short Answer Questions (30 marks - 30 minutes) 1) Describe the audit procedures typically used to test for out-of-period liabilities (also referred to as the search for unrecorded accounts payable). (5 marks) ANSWER: The audit procedures typically used to test for out-of-period liabilities are: · Examine underlying documentation for subsequent cash disbursement. · Examine underlying documentation for bills not paid several weeks after the year-end. · Trace receiving reports issued before year-end to related vendors' invoices. · Trace vendors' statements that show a balance due to the accounts payable trial balance. · Send confirmations to vendors with which the client does business, including zero balance confirmations. 2. Describe three tests of controls commonly used to test the accuracy objective for sales. (5 marks) Note: Answers will vary beyond the three examples below.) Three tests of controls commonly used to test the accuracy objective for sales include: · Recompute information on sales invoices (re-foot and re-extend the invoice). · Trace entries in sales journal to sales invoices, comparing invoice total with amount recorded in journal. · Trace details on sales invoices (description, price per unit, quantity) to shipping
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This note was uploaded on 01/10/2010 for the course MANAGEMENT adm 3349 taught by Professor Church during the Fall '09 term at University of Ottawa.

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midterm2markingkey%20sectionB - Mid-Term Examination #2 ADM...

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