Ch 16 Homework

Match each substantive procedure relative to cash listed with its corresponding audit objective or assertion. Existence, occurrence, accuracy, cutoff, and rights Obtain analyses of cash balances and reconcile them to the general ledger Confirm cash balances with financial institutions Analyze bank transfers occurring at year-end Investigate payments to related parties Count Cash on Hand Verify the client's cutoff of cash transactions

Count Cash on Hand Confirm cash balances with financial institutions

To support financial statement assertions, an auditor develops specific audit procedures to satisfy or accomplish each assertion. Select the most appropriate procedure from the following list and enter the number in the appropriate place on the grid. (An audit procedure may be selected once or not at all.) Question: Verify that investments are properly valued at the lower of cost or market at the balance sheet date (valuation and allocation). Vouch opening balances in the subsidiary ledgers to the prior year's audit working papers. Determine that employees who are authorized to sell investments do not have access to cash. Examine supporting documents for a sample of investment transactions to verify that prenumbered documents are used. Determine that any impairments in the price of investments have been properly recorded. Verify that transfers from the current to the noncurrent investment portfolio have been properly recorded. Obtain positive confirmations as of the balance sheet date of investments held by independent custodians. Trace investment transactions to minutes of board of directors' meetings to determine that transactions were properly authorized.

Determine that any impairments in the price of investments have been properly recorded.

Match each substantive procedure relative to cash listed with its corresponding audit objective or assertion. Presentation and disclosure Obtain analyses of cash balances and reconcile them to the general ledger Confirm cash balances with financial institutions Analyze bank transfers occurring at year-end Investigate payments to related parties Count Cash on Hand Verify the client's cutoff of cash transactions

Investigate payments to related parties

Match each substantive procedure relative to cash listed with its corresponding audit objective or assertion. Existence and Accuracy Obtain analyses of cash balances and reconcile them to the general ledger Confirm cash balances with financial institutions Analyze bank transfers occurring at year-end Investigate payments to related parties Count Cash on Hand Verify the client's cutoff of cash transactions

Obtain analyses of cash balances and reconcile them to the general ledger

To support financial statement assertions, an auditor develops specific audit procedures to satisfy or accomplish each assertion. Select the most appropriate procedure from the following list and enter the number in the appropriate place on the grid. (An audit procedure may be selected once or not at all.) Question: Verify that recorded investments represent investments actually owned at the balance sheet date (rights and obligations). Vouch opening balances in the subsidiary ledgers to the prior year's audit working papers. Determine that employees who are authorized to sell investments do not have access to cash. Examine supporting documents for a sample of investment transactions to verify that prenumbered documents are used. Determine that any impairments in the price of investments have been properly recorded. Verify that transfers from the current to the noncurrent investment portfolio have been properly recorded. Obtain positive confirmations as of the balance sheet date of investments held by independent custodians. Trace investment transactions to minutes of board of directors' meetings to determine that transactions were properly authorized.

Obtain positive confirmations as of the balance sheet date of investments held by independent custodians.

To support financial statement assertions, an auditor develops specific audit procedures to satisfy or accomplish each assertion. Select the most appropriate procedure from the following list and enter the number in the appropriate place on the grid. (An audit procedure may be selected once or not at all.) Question: Verify that investments are properly described and classified in the financial statements (presentation and disclosure-classification). Vouch opening balances in the subsidiary ledgers to the prior year's audit working papers. Determine that employees who are authorized to sell investments do not have access to cash. Examine supporting documents for a sample of investment transactions to verify that prenumbered documents are used. Determine that any impairments in the price of investments have been properly recorded. Verify that transfers from the current to the noncurrent investment portfolio have been properly recorded. Obtain positive confirmations as of the balance sheet date of investments held by independent custodians. Trace investment transactions to minutes of board of directors' meetings to determine that transactions were properly authorized.

Verify that transfers from the current to the noncurrent investment portfolio have been properly recorded.

Match each substantive procedure relative to cash listed with its corresponding audit objective or assertion. Cutoff, existence, occurrence, rights, and completeness Obtain analyses of cash balances and reconcile them to the general ledger Confirm cash balances with financial institutions Analyze bank transfers occurring at year-end Investigate payments to related parties Count Cash on Hand Verify the client's cutoff of cash transactions

Verify the client's cutoff of cash transactions Analyze bank transfers occurring at year-end Investigate payments to related parties

Which of the following cash transfers results in a misstatement of cash at December 31? a. 12/31 1/4 12/31 12/31 b. 1/4 1/5 12/31 1/4 c. 12/31 1/5 12/31 1/4 d. 1/4 1/11 1/4 1/4

b. 1/4 1/5 12/31 1/4

On receiving the cutoff bank statement, the auditor should vouch: Multiple Choice deposits listed on the cutoff statement to deposits in the cash receipts journal. deposits in transit on the year-end bank reconciliation to deposits in the cash receipts journal. checks dated before year-end listed as outstanding on the year-end bank reconciliation to the cutoff statement. checks dated after year-end to outstanding checks listed on the year-end bank reconciliation and to the cutoff statement.

checks dated before year-end listed as outstanding on the year-end bank reconciliation to the cutoff statement.

An auditor ordinarily sends a standard confirmation request to all banks with which the entity has done business during the year under audit, regardless of the year-end balance. One purpose of this procedure is to: detect kiting activities that may otherwise not be discovered. request that a cutoff bank statement and related checks be sent to the auditor. seek information about loans from the banks. provide the data necessary to prepare a proof of cash.

seek information about loans from the banks.

The audit firm's valuation specialist would likely be brought in to assist in the audit of fair value measurements at an entity when the following is present: the entity is a new audit client. significant uncertainty exists in key inputs to the entity's valuation models. the entity owns a large and diverse portfolio of publicly traded stock. the entity has a financial instrument with a Level 2 input.

significant uncertainty exists in key inputs to the entity's valuation models.

The primary evidence regarding year-end bank balances is documented in the: outstanding check listing. standard bank confirmations. interbank transfer schedule. bank deposit lead schedule.

standard bank confirmations.