Midterm #2 with solutions

If the auditor is appointed after the year end of the

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12. If the auditor is appointed after the year end of the client, the auditor
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Question #2 – 12 marks Choose 4 of the following 6 . Fill in the chart below. For 4 of the following misstatements: a) Identify the audit objective to which it pertains. – 1 mark each b) Identify an internal control that should prevent it. – 1 mark each c) Identify a test of details audit procedure that an auditor could use to detect it. – 1 mark each 1. The total of the outstanding cheque list on the bank reconciliation did not agree to the sum of the outstanding cheques. 2. A backhoe was purchased during the year and recorded in the ‘Outdoor Maintenance’ expense account. 3. Goods shipped and included in the current period sales were returned in the subsequent period. 4. An employee continued to be paid after they were terminated. 5. Obsolete inventory is included in the balance at year end.
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