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Audit Assertions and Reporting: Key Concepts and Applications

This paper explores audit assertions and reporting, explaining their importance in financial auditing.

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    Audit Assertions and Reporting: Key Concepts and Applications Accounting Final Exam 35 MCQs Question1 Not yet answered Marked out of 8.00 Question text Which ASB balance assertion is of the most importance to auditors for long - term liabilities? Select one: a. Existence b. Rights & Obligations c. Valuation d. Completeness Question2 Not yet answered Marked out of 8.00 Question text Which of the following management assertions for long - term liabilities is related to the ASB balance assertion of completeness? Select one: a. All material long - term liabilities are recorded. b. Disclosures of maturities for the next five years are accurate and adequate. c. Terms, conditions, and restrictions relating to noncurrent debt are adequately disclosed. d. New long - term liabilities and debt extinguishments are properly authorized. Question3 Not yet answered Marked out of 8.00 Question text In the audit of notes payable, an auditor testing the ASB balance assertion of accuracy and valuation most likely would Select one: a. Select a sample of notes payable and vouch cash receipt to the bank statement. b. Read directors' and finance committee's minutes for authorization of financing transactions. c. Select a sample of paid notes and trace interest expense to the general ledger account. d. Select a sample of paid notes and recalculate interest expense for the period under audit. Question4 Not yet answered Marked out of 8.00 Question text During an audit of an entity's stockholders' equity accounts, the auditor determines whether there are restrictions on retained earnings resulting from loans, agreements, or state law. This audit procedure most likely is intended to verify the ASB presentation and disclosure assertion of

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    Select one: a. Completeness b. Understandability c. Occurrence. d. Rights and Obligations. Question5 Not yet answered Marked out of 8.00 Question text In confirming with an outside agent, such as a financial institution, that the agent is holding investment securities in the client's name, an auditor most likely gathers evidence in support of ASB balance assertion of existence and Select one: a. Rights & obligations b. Completeness c. Valuation d. Accuracy Question6 Not yet answered Marked out of 8.00 Question text The focus of controls in the finance and investment cycle is on Select one: a. Physical security of assets. b. Prenumbered documents c. Computer controls over transactions. d. Proper authorizations and competent personnel. Question7 Not yet answered Marked out of 8.00 Question text Keeping track of securities owners for payment of interest or dividends is usually done by the company's Select one: a. Transfer Agent b. Register c. Broker d. Treasurer Question8 Not yet answered Marked out of 8.00 Question text Records of stock and bond certificates are usually maintained by the company's Select one: a. Treasurer b. Transfer Agent

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    c. Chief Financial Officer d. Register Question9 Not yet answered Marked out of 8.00 Question text A related party is a person or entity that Select one: a. Is a member of the company's management. b. Does business with the company. c. Has a family tie to a management member. d. Can exert significant influence over or be influenced by the company. Question10 Not yet answered Marked out of 8.00 Question text To whom should written representations be addressed? a. Auditors b. Board of directors c. Client d. Stockholders Question11 Not yet answered Marked out of 7.00 Flag question Question text If auditors are appointed on January 3, 2012, the date of the financial statements is December 31, 2012, the date of the auditors' report is February 7, 2013 and the audit report release date is March 3, 2013, what is the appropriate date of the written representations? a. January 3, 2012 b. December 31, 2012 c. February 7, 2013 d. March 3, 2013 Question12 Not yet answered Marked out of 8.00 Question text Orange Corporation was audited for the year ended December 31. The audit was completed on January 25; prior to the release of the report, auditors learned of a two - for - one stock split on February 1. If dual dating is used, what are the proper dates for the auditors' reports? a. December 31 and January 25 b. January 25 and February 1 c. January 25 and February 15 d. February 1 and February 25 Question13 Not yet answered

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