1. Explain the cutoff assertion. How is it tested for sales by an auditor?
2. Explain the existence assertion particularly as it relates to inventories included in the balance sheet. What is the most reliable test for an auditor to use regarding a client's inventory stored at an outside location?
3. What is the difference between statistical and nonstatistical sampling? What is an advantage of statistical sampling over nonstatistical sampling in tests of controls?
4. Define contingent liabilities and describe the types of events that might create a contingent liability. Is there such a thing as a gain contingence? Describe places auditors might look for contingent liabilities. What are the governing components in GAAP for this area?
5. What is discussed in AU-C 530? How does it identify the two general approaches to this area?