b Analytical procedures used in risk assessment procedures should not use

B analytical procedures used in risk assessment

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b. Analytical procedures used in risk assessment procedures should not use nonfinancial information. c. Analytical procedures usually are effective and efficient for tests of controls. d. Analytical procedures alone may provide the appropriate level of assurance for some assertions. Problem 4 - Types of Tests and Objectives - from update sample exam For each audit procedure, identify the following (use the abbreviations in bold for a., and the numbers for b). Choose only one response for each item. a. Whether it is a test of control ( TOC ), substantive test of transactions ( STOT ), test of details of balances ( TODB ) or substantive analytical procedure ( SAP ) (1/2 point each). b. The primary audit objective being satisfied. Answer N/A for analytical procedures. (1 point each). List only one response , even if the test has multiple objectives. Balance-related Audit Transaction-related Audit Objectives Objectives 1. Existence 9. Occurrence 2. Completeness 10. Completeness 3. Accuracy 11. Accuracy 4. Classification 12. Classification 5. Cutoff 13. Timing 6. Detail tie-in 14. Posting and summarization 7. Realizable value 8. Rights and obligations 1. Account for a sequence of receiving reports and verify that each one has an invoice attached. a. TOC b. 10 2. Trace entries from the cash receipts journal to the accounts receivable master file. (journal to records = posting) a. STOT b. 14 6
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Balance-related Audit Transaction-related Audit Objectives Objectives 1. Existence 9. Occurrence 2. Completeness 10. Completeness 3. Accuracy 11. Accuracy 4. Classification 12. Classification 5. Cutoff 13. Timing 6. Detail tie-in 14. Posting and summarization 7. Realizable value 8. Rights and obligations 3. Examine vendor's invoices and receiving reports supporting amounts on the listing of accounts payable. a. TODB b. 1 4. Examine duplicate sales invoices (transaction) for indication that prices were compared to the approved price list. a. TOC b. 11 5. Foot the sales journal for one month and trace postings to the general ledger and accounts receivable master file. a. STOT b. 14 6. Send confirmations to customers to determine whether they have an accounts receivable balance. a. TODB b. 1 7
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  • Spring '14
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