ABC Company had a major sale to XYZ Company. This ale accounted for 20% of the r
ID: 2442926 • Letter: A
Question
ABC Company had a major sale to XYZ Company. This ale accounted for 20% of the revenue of ABC Company. The auditors performed the audit procedures listed 1 – 3. For each audit procedure select the ASB transaction assertion that is most likely being tested.A. Occurrence
B. Completeness
C. Cutoff
D. Accuracy
E. Classification
______ 1. The auditor reviewed the shipping documents to check the date that product was shipped to XYZ Company.
______ 2. The auditor reviewed the shipping documents to ensure that all product included in the sales revenue to XYZ had been shipped.
______ 3. The auditor reviewed the invoice sent to XYZ Company to ensure that XYZ had been properly billed.
For each of the matters below, indicate through the appropriate letter the group of generally accepted auditing standards to which the matter is most closely related.
A. General standards
B. Standards of field work
C. Standards of reporting
_______ 1. The mental attitude and impartiality of auditors.
_______2. Auditors' overall conclusion of the fairness of the client's financial statements.
_______3. The use of an audit program to identify audit procedures to be performed during the engagement.
_______4. Auditors' assessment of control risk after performing tests of controls.
_______5 Accounting firm policies with respect to the level of expected continuing professional education.
_______6. Client's disclosure of all pending litigation against the client at year end.
_______7. The hierarchical review process used to evaluate the appropriateness of audit documentation prepared by assistants.
_______8. Auditors' requests to obtain bank statements directly from institutions with whom the client does business.
_______9. The client's use of accounting principles that are consistent with those used in prior years.
_______ 10. Actions taken by auditors to communicate their level of involvement with and responsibility assumed for the client's financial statements.
Explanation / Answer
A 1 Occurance 2 Accuracy 3 accuracy B 1 General Standards 2 Standards of reporting 3 Standards of field work 4 Standards of reporting 5 General Standards 6 Standards of reporting 7 Standards of field work 8 Standards of field work 9 General Standards 10 General Standards