Audit Assertions and Reporting: Key Concepts and Applications

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Audit Assertions and Reporting: Key Concepts and ApplicationsAccounting Final Exam 35 MCQsQuestion1Not yet answeredMarked out of 8.00Question textWhich ASB balance assertion is of the most importance to auditors for long-termliabilities?Select one:a. Existenceb. Rights & Obligationsc. Valuationd. CompletenessQuestion2Not yet answeredMarked out of 8.00Question textWhich of the following management assertions for long-term liabilities is related to the ASBbalance 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.Question3Not yet answeredMarked out of 8.00Question textIn the audit of notes payable, an auditor testing the ASB balance assertion of accuracy andvaluation mostlikely wouldSelect 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.Question4Not yet answeredMarked out of 8.00Question textDuring an audit of an entity's stockholders' equity accounts, the auditor determines whether thereare restrictions on retained earnings resulting from loans, agreements, or state law. This auditprocedure most likely is intended to verify the ASB presentation and disclosure assertion of

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Select one:a. Completenessb. Understandabilityc. Occurrence.d. Rights and Obligations.Question5Not yet answeredMarked out of 8.00Question textIn confirming with an outside agent, such as a financial institution, that the agent is holdinginvestment securities in the client's name, an auditor most likely gathers evidence in support ofASB balance assertion of existence andSelect one:a. Rights & obligationsb. Completenessc. Valuationd. AccuracyQuestion6Not yet answeredMarked out of 8.00Question textThe focus ofcontrols in the finance and investment cycle is onSelect one:a. Physical security of assets.b. Prenumbered documentsc. Computer controls over transactions.d. Proper authorizations and competent personnel.Question7Not yet answeredMarked out of 8.00Question textKeeping track of securities owners for payment of interest or dividends is usually done by thecompany'sSelect one:a. Transfer Agentb. Registerc. Brokerd. TreasurerQuestion8Not yet answeredMarked out of 8.00Question textRecords of stock and bond certificates are usually maintained by the company'sSelect one:a. Treasurerb. Transfer Agent

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c. Chief Financial Officerd. RegisterQuestion9Not yet answeredMarked out of 8.00Question textA related party is a person or entity thatSelect 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.Question10Not yet answeredMarked out of 8.00Question textTo whom should written representations be addressed?a. Auditorsb. Board of directorsc. Clientd. StockholdersQuestion11Not yet answeredMarked out of 7.00Flag questionQuestion textIf 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 isMarch 3, 2013, what is the appropriate date of the written representations?a. January 3, 2012b. December 31, 2012c. February 7, 2013d. March 3, 2013Question12Not yet answeredMarked out of 8.00Question textOrange Corporation was audited for the year ended December 31. The audit was completed onJanuary 25; prior to the release of the report, auditors learned of a two-for-one stock split onFebruary 1. If dual dating is used, what are the proper dates for the auditors' reports?a. December 31 and January 25b. January 25 and February 1c. January 25 and February 15d. February 1 and February 25Question13Not yet answered

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