Audit

Part B. The visualization titled "Gross Margin Percentage by Customer" makes it clear which customer(s) should be investigated. That is: a.Customer 17272 has a margin outside of the acceptable range, therefore, it should be investigated. b.There is not enough information here to make a decision on which customers should be investigated. c.None need to be investigated because they are all within the appropriate range. d.All the customers below 50% should be investigated because these margins are too low.

a.Customer 17272 has a margin outside of the acceptable range, therefore, it should be investigated.

Part C. The labor force in Kissimmee and Osceola county is: a.growing steadily b.falling at a slow rate c.falling rapidly d.growing rapidly

a.growing steadily

Part D. The number of people employed in Kissimmee and Osceola county is: a.growing steadily b.falling rapidly c.growing rapidly d.falling at a slow rate

a.growing steadily

Part C. Which of the following is most likely true: a. The client does not have a strong system of internal controls if the gross margin for one customer is 15%. b. The use of ADA helps the auditor quickly identify where more audit work should be targeted. c. This chart does not provide sufficient appropriate audit evidence. d. There are so few customers, the auditor should investigate them all.

b. The use of ADA helps the auditor quickly identify where more audit work should be targeted.

Question 2. In testing controls, the auditor can obtain evidence from the client's information system and analyze it in a tabular or visual form. Your client has controls in place regarding credit limits for customers. The client's software has the capability to compare a customer's outstanding receivable balance, plus the anticipated sale, with the customer's credit limit in the approved customer master file. Credit limits vary by customer. For a sale to be made that will cause the customer to exceed the established credit limit, special authorization must be granted by the credit department. The table titled "Missing Credit Checks" is a list of customer numbers for customers who did not have authorization to exceed the established credit limit. The visualization titled "Credit Limit Compared to Total Sales" is the difference between the invoices for the month and the customer's credit limit. Part A. Assume the auditor's tolerable deviation rate is 2%. If the visualization is the result of the auditor's test of controls for the year and the population is 300 items, do you think there is an issue with controls? a.Yes, and the issue relates to occurrence of revenue b.No. We have sufficient appropriate evidence that the controls over occurrence of revenue can be relied upon because a .66% deviation rate would be below our tolerable deviation rate. c.No. We have sufficient appropriate evidence that the controls over the completeness of revenue can be relied upon because a .66% deviation rate would be below our tolerable deviation rate. d.Yes, and the issue relates to completeness of revenue.

b.No. We have sufficient appropriate evidence that the controls over occurrence of revenue can be relied upon because a .66% deviation rate would be below our tolerable deviation rate.

Part C. Which of the following is most likely true: a.The client's system both prevents and detects errors with credit authorization. b.The client's system does not prevent but does detect errors in credit authorization. c.The client's system fails to prevent or detect errors with credit authorization. d.The client's system prevents but does not detect errors in credit authorization.

b.The client's system does not prevent but does detect errors in credit authorization

Question 3. Audit data analytics (ADA) techniques are helpful when the data are reliable, clean, and come from an information system with strong internal controls. In addition, it is helpful if the population is large and the data are available in electronic form. You are auditing a client in the construction industry and have the data for construction projects for the month of June 2019. You want to know if recorded revenue is complete and actually occurred. You start with ADA and if you see something unexpected, you will use detailed testing. The client records revenue with a markup over costs to result in gross margins between 40% and 60%. The visualization titled "Costs, Revenue, Margins by Customer" shows recorded amounts by customer in the month of June. Part A. Do any of the margins for the customers seem like they deserve follow up? a.No. All the margins and costs appear to be fairly similar, as one would expect with margins a bit above and a bit below 50%. b.Customers 17272 and 25866 have low margins that should be investigated. c.Customer 17272 seems to have an extremely low margin that requires follow up. d.Customer 21652 has revenue that appears too high compared to the rest of the customers. It should be investigated.

c.Customer 17272 seems to have an extremely low margin that requires follow up.

Part B. Assume the auditor's tolerable deviation rate is 2%. If the visualization is the result of the auditor's test of controls for one month and the total population for the year is 300 items, do you think there is an issue with controls? a.No. We have sufficient appropriate evidence that controls over the occurrence of revenue can be relied upon. b.No. We have sufficient appropriate evidence that controls over the completeness of revenue can be relied upon. c.Yes. Completeness of revenue is a possible issue, because if this is a representative month, then the rate of deviation would be 8%. We may not be able to assess control risk as low. d.Yes. Occurrence of revenue is a possible issue, because if this is a representative month, then the rate of deviation would be 8% which is greater than the tolerable deviation rate. We may not be able to assess control risk as low.

c.Yes. Occurrence of revenue is a possible issue, because if this is a representative month, then the rate of deviation would be 8% which is greater than the tolerable deviation rate. We may not be able to assess control risk as low.

Question 1 Founded in 1924, the Kissimmee/Osceola County Chamber of Commerce (KOCCC) represents approximately 900 small, medium and large companies, organizations and governments. From cattle operations going back generations, to entrepreneurs just getting their companies started, the Kissimmee/Osceola County Chamber of Commerce includes virtually every type of business.KOCCC is your audit client. Part A. As part of the risk assessment phase, your Senior Manager has shown you the following visual. Answer the questions below regarding what the dashboard "Labor Statistics Kissimmee Osceola County" says about the risk of this client. a.rising unemployment b.stable unemployment c.falling unemployment d.extreme unemployment

c.falling unemployment

Part B. The KOCCC has potential membership: a.increase b.decrease c.stability d.cannot tell from this data

d.cannot tell from this data